What changed in this filing

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Item 1. Business

2022-09-27 compared with 2021-09-29 · 1346 added, 1148 removed, 655 unchanged (79% of the section changed)

Bion Environmental Technologies, Inc.

("Bion,"

"Company,"

"We,"

"Us,"

or "Our") was incorporated in 1987 in the State of Colorado.

Our patented and proprietary technology provides economically

sustainable comprehensive environmental solutions to one of the greatest water air and water quality problems in the U.S.

from large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations”

or “CAFOs”).

Application of our technology and technology platform can simultaneously mitigate environmental problems and improve operational/resource

efficiencies by recovering high-value co-products from the CAFOs’

waste stream that have traditionally been wasted or underutilized,

including renewable energy, nutrients (including ammonia nitrogen and phosphorus) and water.

During the 2016 to 2021 fiscal years, the Company

focused a large portion of its activities on developing, testing and demonstrating the 3rd generation of its technology and technology

platform (“3G Tech”) with emphasis on increasing the efficiency of production of valuable co-products from the waste treatment

process, including ammonia nitrogen in the form of organic ammonium bicarbonate products.

The Company’s initial ammonium bicarbonate

liquid product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during

An application for our first solid ammonium bicarbonate product –

AD Nitrogen –

has been filed and is in the review

process (see discussion at “Organic Fertilizer products”

Bion is now focused primarily on:

i) development/construction

of its initial commercial-scale 3G Tech installation, ii) developing applications and markets for its organic fertilizer products and

its sustainable (conventional and organic) animal protein products, and iii) initiation and development of joint ventures (“JVs”

as discussed below) (and related projects) and strategic relationships based on the augmented capabilities of our 3G Tech, while (iv)

continuing to pursue business opportunities related to large retrofit projects (such as the Kreider poultry project JV described below)

and (vi) ongoing R&D activities.

Bion Environmental Technologies, Inc.'s ("Bion,"

"Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado.

mission is to create extraordinary value for our shareholders and employees (all of whom own securities in the Company) while delivering

premium, sustainable products to our customers (and other stakeholders) through ventures developing profitable, transparent, and sustainable

solutions for livestock agriculture.

Our patented and proprietary technology provides

advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated

Animal Feeding Operations” or “CAFOs").

Livestock production and its waste, particularly from CAFOs, has been

identified as one of the greatest soil, air, and water quality problems in the U.S.

Application of our third generation

technology and business/technology platform (“Gen3Tech”) can largely mitigate these environmental problems, while

simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the CAFOs’ waste stream.

These waste stream ‘assets’ – including primarily nutrients and methane – have traditionally been wasted or

underutilized and are the same ‘pollutants’ that today fuel harmful algae blooms, contaminate groundwater, and

exacerbate climate change.

During the first half of 2022 Bion began marketing

our sustainable beef opportunity to retailers, food service distributors and the meat industry in the U.S.

In general, the response

has been favorable.

During July 2023, Bion announced a letter of intent (“Ribbonwire LOI”) to develop its first large-scale

commercial project, a 15,000-head sustainable beef cattle feeding operation together with the Ribbonwire Ranch, in Dalhart, Texas (with

a provision to expand to 60,000 head) (“Dalhart Project”).

The Dalhart Project will be developed to produce blockchain-verified,

sustainable beef (with reduced the stress on cattle caused by extreme weather and temperatures and resulting higher feed/weight gain efficiency)

while remediating the environmental impacts associated usually associated with cattle CAFOs.

Bion’s patented technology will treat

the waste stream and recover/refine valuable coproducts that include clean water, renewable natural gas (RNG), photovoltaic solar electricity,

organic fertilizer and potentially other products.

We anticipate converting the Ribbonwire LOI into a definitive agreement with Ribbonwire

Ranch and creating distribution agreements with key retailers and food service distributors during the current fiscal year.

Bion’s business model and technology platform

can create the opportunity for joint ventures (in various contractual forms)(“JVs”) between the Company and large livestock/food/fertilizer

industry participants based upon the supplemental cash flow generated by implementation of our Gen3Tech business model, which cash flows

will support the costs of technology implementation (including servicing related debt).

We anticipate this will result in substantial

long-term value for Bion.

In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional

and organic) in meat will represent the single largest enhanced revenue contributor provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business with be conducted through such JVs, but a material portion may involve

licensing and or other approaches.

Bion’s Gen3Tech was designed to capture and

stabilize these assets and produce renewable energy, fertilizer products, and clean water as part of the process of raising verifiably

sustainable livestock.

All steps and stages in the treatment process will be third-party verified, providing the basis for additional

revenues, including renewable energy-related credits and, eventually, payment for ecosystem services, such as nutrient credits as described

The same verified data will be used to substantiate the claims of a USDA-certified sustainable brand that will support premium

pricing for the meat/ animal protein products that are produced in Bion facilities.

Our business plan is focused on executing

multiple agreements and letters of intent related to the “Bion Beef Opportunity” and commencing development of multiple

sustainable beef joint venture projects over the next twelve-eighteen (12-18) months while moving forward with the Initial Project

(see below) and the Dalhart Project.

Bion also intends to pursue other opportunities in the livestock industry enabled by our

Gen3Tech business model.

The Ribbonwire LOI announcement has generated significant interest within the livestock industry

(among ranchers, feedlot operators, farmers and other AG industry parties) and food distribution and retail industry.

that this interest, combined with consumer interest in ‘sustainable products’ and the growing enthusiasm among some

livestock industry parties for environmental/sustainable/regenerative practices, provides Bion (and its partners/venturers) with an

opportunity to move forward with a truly sustainable solution in this industry segment.

During the next six months, the Company intends to

construct and begin operations of phase 1 of our Initial Project located near Fair Oaks, Indiana.

Bion expects the Initial Project to

provide data that illustrates the effectiveness of our Gen3Tech in a commercial setting by the end of the 2 nd quarter in 2023

which will support development of the Dalhart Project (and other projects) during 2023 and thereafter.

We believe this data will

also provide additional potential stakeholders (cattle producers, cattle feeders, packers, distributors, retailers and financial institutions)

with the information they need to proceed with confidence in collaborating with Bion on multiple new projects (see below).

is now focused primarily on:

i) development/construction of the Initial Project, our initial commercial-scale Gen3Tech installation (see

below and Notes to Financial Statements ,

ii) development/construction of the Dalhart Project, iii) developing applications and markets for its sustainable (conventional and organic)

animal protein products and its low carbon organic fertilizer products , iv) discussions regarding initiation and development of agreements

and joint ventures (“JVs” as discussed below) (and related projects) based on the augmented capabilities of our Gen3Tech

business platform (in the sustainable beef and other livestock segments), while (v) continuing to pursue business opportunities related

to large retrofit projects (such as the Kreider poultry project JV described below) and vi) ongoing R&D activities.

At present, there is essentially no traceable and

verifiable ‘sustainable beef’ available to the US market except for niche products.

In response to consumer demand for transparency

and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver

these attributes in their products.

While we anticipate a faster adoption of tracking, verification and sustainability technologies in

other perishable food categories like produce and dairy due to their harvest and production techniques, meat industry leaders have also

announced their willingness to move forward with initiatives in this area.

Bion predicts that within approximately five years, consumers

will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the meat department.

Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three (3) years (end of

2025) and 25% in five (5) years (end of 2027) (approximately 2,000,000 cattle annually) (and more thereafter).

If Bion can successfully

execute on its sustainable beef business plan, facilities utilizing Bion’s Gen3Tech platform will provide one-third (1/3) or more

of that of the premium market segment (and a higher portion of meat that is actually traceable and verifiably sustainable).

to have multiple sustainable beef projects under development (within 3-5 distinct JVs) by the end of 2023.

Our first commercial project

is likely to be the Dalhart Project but we anticipate commencing additional sustainable beef projects during 2023 as well.

target is to have at least three (3) facility modules (15,000 head per module)(“Modules”) in development/under construction

during 2023 in three (3) different JVs with the initial barns being populated with livestock by fall/winter 2024-25.

Further expansion

in the number of distinct JVs is projected through 2025 aiming at 5-10 JVs in process --- each of which JVs will be pursuing development

of multiple Modules with targets of 12-15 populated Modules by the end of 2025 (approximately 2%-3% of the US beef market) and 30-45 Modules

constructed and populated by 2027-28 (approximately 6%-8% of the US beef market) with further expansion thereafter.

Bion’s current

goal is that its Gen3Tech platform will be utilized to produce 33% of the verifiable “sustainable beef” category at the end

of the period (which will equal approximately 2 million cattle annually)(45 Modules).

There is no assurance that the Company will reach

or approach the goals/targets set forth above.

Reaching such goals/targets will require access to very large amounts of capital (equity

and debt) as each module is projected to cost in excess of $50 million to construct and require mobilization of substantial personnel,

technical resources and management skills.

The Company does not possess either the financial or personnel resources required internally

and will need to source such resources from outside itself.

During this five (5) year period, the Company also

anticipates having additional Gen3Tech projects underway in the pork/dairy/egg sectors of the US animal protein market.

HISTORY, BACKGROUND AND CURRENT ACTIVITIES

Since the Company’s inception, Bion has designed and developed

advanced waste treatment systems for livestock.

The first and second generations of Bion’s technology platform were biological systems,

primarily focused on nutrient control.

Over 30 of these systems were deployed at New York dairies, Florida food processing facilities

and dairies, North Carolina hog farms, a Texas dairy and a Pennsylvania dairy (“Kreider 1 Project”).

The systems were highly

effective at their intended purpose:

capturing nitrogen and phosphorus.

They produced BionSoil as a byproduct, which was a remarkably

effective soil amendment/ fertilizer product, but whose value was not enough to support a viable business model.

As such, these early

technology iterations were entirely dependent on either implementation of new regulations requiring waste treatment, or subsidy/ incentive

programs that would provide ‘payment for ecosystem services’.

By the mid-2010’s, it became apparent that neither of

these options were imminent or even assured, so the Company initiated the steps to reimagine and redesign its technology.

From 2016 to 2021 fiscal years, the Company focused

most of its activities and resources on developing, testing and demonstrating the third generation of its technology and technology platform

(“Gen3Tech”) that was developed with an emphasis producing more valuable co-products from the waste treatment process, including

renewable natural gas and ammonium bicarbonate, a low-carbon, organic ’pure’ nitrogen fertilizer product while raising sustainable

The $175 billion U.S.

livestock industry is under

intense scrutiny for its environmental and public health impacts –

its ‘environmental sustainability’-- at the same

intense scrutiny for its environmental and public health impacts – its ‘environmental sustainability’-- at the same

time it is struggling with declining revenues and margins (derived in part from clinging to its historic practices and resulting limitations

and impacts) which threaten its ‘economic sustainability’.

Its failure to adequately respond to consumer concerns ranging

including food safety, environmental impacts, and humane treatment of animals have provided impetus for plant-based alternatives such

as Beyond Meat and Impossible Burger (and many others) being marketed as “sustainable”

alternatives for this growing consumer

segment of the market.

The Company believes that its 3G Tech, in addition

to providing superior environmental remediation, creates opportunities for large scale production of:

i) verifiably sustainable-branded

livestock products and ii) verifiably sustainable organic-branded livestock products that will command premium pricing (in part due to

ongoing monitoring and third-party verification of environmental performance which will provide meaningful assurances to both consumers

and impacts) which threaten its ‘economic sustainability’.

Its failure to adequately respond to consumer concerns including

food safety, environmental impacts, and inhumane treatment of animals have provided impetus for plant-based alternatives such as Beyond

Meat and Impossible Burger (and many others) being marketed as “sustainable” alternatives for this growing consumer segment

of the market.

The Company believes that its Gen3Tech, in addition

to providing superior environmental remediation, creates opportunities for large scale production of i) verifiably sustainable-branded

livestock products and ii) verifiably sustainable organic-branded livestock products, both of which will command premium pricing (in part

due to ongoing monitoring and third-party verification of environmental performance which will provide meaningful assurances to both consumers

and regulatory agencies).

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production/marketing opportunity for Bion.

Our 3G Tech platform will also produce revenues from co-products:

i) pipeline quality biogas

(and related environmental credits) and ii) valuable organic fertilizer products, which can be utilized in the production of organic grains

for use as feed for raising organic livestock (some of which may be utilized in the Company’s JV projects) and/or marketed to the

growing organic fertilizer market.

During late September 2021, Bion entered into a lease

for the development site of its initial commercial scale 3G Tech project in September 2021(“Initial Project”), which Initial

Project will be located on approximately four (4) acres of leased land near Fair Oaks, Indiana.

Terms for an additional related agreement

regarding disposal of certain manure effluent have been agreed upon with the Curtis Creek Dairy unit of Fair Oaks Farms (“FOF”)

and the Company expects the agreement to be finalized by the end of the first full week of October 2021.

Design and pre-development work

commenced during August 2021 and preparation for active surveying, site engineering and other work is now underway.

The Initial Project

will be an environmentally sustainable beef cattle feeding facility, equipped with state-of-the-art housing and Bion’s 3G-Tech platform

to provide waste treatment and resource recovery.

Bion has designed the project to house and feed approximately 300 head of beef cattle.

The facility will include Bion’s 3G Tech platform including:

i) covered barns with solar photovoltaic generation, ii) anaerobic

digestion for renewable energy recovery;

iii) livestock waste treatment and resource recovery technology;

iv) Bion’s ammonium bicarbonate

recovery and crystallization technology and iv) data collection software to document system efficiencies and environmental benefits (with

the Bion 3G Tech facilities capable of treating the waste from approximately 1,500 head).

The facility will be large enough to demonstrate

engineering capabilities of Bion’s 3G Tech at commercial scale, but small enough that it can be constructed and commissioned quickly,

with operations targeted to commence sometime during the Spring of 2022.

This project is not being developed at economic commercial scale

Our Gen3Tech will also produce (as co-products) biogas, solar photovoltaic electricity in appropriate

locations, and valuable low carbon organic fertilizer products, which can be utilized in the production of organic grains for use as feed

for raising organic livestock (some of which may be utilized in the Company’s JV projects) and/or marketed to the growing organic

fertilizer market.

During July 2022, the Company entered into a letter

of intent with Ribbonwire Ranch (Dalhart, Texas) (“Ribbonwire LOI”) setting forth the parties’ intention to negotiate

a joint venture agreement (“JVA”) and enter into a joint venture (“JV”) to develop and operate an initial 15,000

head integrated, sustainable beef facility on RWR property (“Dalhart Project”) including:

a) innovative cattle barns (with slatted floors to facilitate movement of manure to the anaerobic digester

and potentially solar PV generation on the rooftops which barns will improve the living conditions of the animals while increasing feeding/weight

gain efficiency,

b) ‘customized’ anaerobic digestion systems (including pretreatment to increase renewable natural

gas (‘RNG’) production and an RNG cleaning system (which will include capture/recycling of the CO2) to allow pipeline sales

and monetization of related environmental credits,

c) a Bion Gen3Tech module (which will utilize the recycled CO2 to increase ammonium bicarbonate recovery)

for the production of ammonium bicarbonate fertilizer for use in organic crop production (plus residual organic solids and clean water),

d) which will produce verifiably sustainable beef products with USDA certified branding.

The Dalhart Project will include expansion capability up to

60,000 head of cattle, in aggregate, located at/around/contiguous to the initial facilities on Ribbonwire property.

The opportunity presented

by the Ribbonwire LOI to commercialize the Company’s Gen3Tech and business model matured more quickly than anticipated (reflecting

strong industry and public momentum in favor of verifiably sustainable food ventures).

As a result, we have shifted our plans to focus

resources and make our initial 15,000 head operation in Dalhart, TX a reality as soon as possible.

To place the Ribbonwire LOI and the Dalhart Project in the context of Company’s

business plan (and our prior public disclosure), if the contemplated venture moves forward on the timelines set forth in the Ribbonwire

LOI, active development of the Dalhart Project will commence early in the second quarter of 2023.

Prior to such activity, the Company intends to construct

and operate the initial phase of the previously announced Gen3Tech demonstration project near Fair Oaks, Indiana (“Initial Project”):

i) to validate our existing data and modeling at commercial scale and ii) to optimize the Bion Gen3Tech module for finalization of design

parameters and fabrication details of our planned 15,000 head commercial facilities (including the Dalhart Project).

For the purposes

of this initial phase, the Company, in order to accelerate the data acquisition phase, intends to utilize anaerobic digester effluent

from the nearby/contiguous Fair Oaks dairy.

Construction and related activities of this demonstration project have commenced with main

module assembly on site targeted to commence during January 2023 (somewhat delayed due to supply chain constraints) followed by operations

through the first half of 2023 to generate the required information.

Thereafter, the Company will evaluate what, if any, additional facilities

and testing will take place at that location.

The Initial Project is not being developed at economic commercial scale

or with an expectation of profitability due to its limited scale.

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critical steps that must be accomplished before developing large projects with JV partners.

Specifically, the Initial Project is being

developed to provide and/or accomplish the following:

Proof of 3G Tech platform scalability

- Document system efficiency and environmental

benefits and enable final engineering modifications to optimize each unit process within the Bion 3G technology platform.

- Environmental benefits will include (without

limitation) renewable energy production (natural gas recovery from AD and solar electric from integrated roof top photovoltaic generation);

The Company anticipates that it will negotiate additional letters of intent

and enter into additional joint ventures related to the development of further commercial-scale sustainable beef projects over the next

6-18 months in addition to the Dalhart Project.

As previously disclosed, during late September 2021,

Bion entered into a lease for the development site of the Initial Project, our initial commercial scale Gen3Tech project, which Initial

Project will be located on approximately four (4) acres of leased land near Fair Oaks, Indiana, and a related agreement regarding disposal

of certain manure effluent with the Curtis Creek Dairy unit of Fair Oaks Farms (“FOF”).

Design and pre-development work commenced

during August 2021 and preliminary surveying, site engineering and other work is now underway along with site-specific engineering and

The Initial Project was initially planned to be an environmentally sustainable beef cattle feeding facility, equipped with

state-of-the-art housing and Bion’s 3G-Tech platform to provide waste treatment and resource recovery.

Bion has designed the project

to house and feed approximately 300 head of beef cattle.

If all phases of the Initial Project are constructed, the facility will include

Bion’s Gen3Tech platform including:

i) covered barns (possibly including roof top solar photovoltaic generation), ii) anaerobic

digestion for renewable energy recovery, iii) livestock waste treatment and resource recovery technology, iv) Bion’s ammonium bicarbonate

recovery and crystallization technology and iv) data collection software to document system efficiencies and environmental benefits (with

the Bion Gen3Tech facilities capable of treating the waste from approximately 1,500 head).

The facility will be large enough to demonstrate

engineering capabilities of Bion’s Gen3Tech at commercial scale, but small enough that it can be constructed and commissioned relatively

Originally, construction and onsite assembly operations were targeted to commence sometime late in 2022, however, supply chain

backlogs have delayed likely delivery dates for core modules of the Bion system to the site until sometime during January 2023.

been moving forward with the development process of the Initial Project.

See Note 3 “Property and Equipment” and Note 12 “Subsequent

Events” (for activities since the start of the first quarter of the 2023 fiscal year).

The Initial Project is not being developed at economic

commercial scale or with an expectation of profitability due to its limited scale.

However, successful installation, commissioning, and

operations will demonstrate scalability, determine operating parameters at scale, and provide ongoing production and engineering capabilities,

all being critical steps that must be accomplished before developing large projects with JV partners.

Specifically, the Initial Project is being developed

to provide and/or accomplish the following:

of Gen3Tech platform scalability

Document system efficiency and environmental benefits and enable final engineering modifications to optimize each unit process within the Bion Gen3Technology platform.

Environmental benefits will include (without limitation) renewable energy production (natural gas recovery from AD and solar electric from integrated roof top photovoltaic generation);

nutrient recovery and conversion to stable organic fertilizer;

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air emission reductions.

Use Bion’s data collection system to support 3 rd party verified system efficiency requirement to qualify for USDA

Process-Verified-Program (PVP):

Use Bion’s data collection system to support 3 rd party verified system efficiency requirement to qualify for USDA Process-Verified-Program (PVP):

certification of sustainable branded beef (and potentially pork) product metrics.

Produce sufficient ammonium bicarbonate nitrogen fertilizer (“AD Nitrogen”) for commercial testing by potential joint

venture partners and/or purchasers and for university growth trials.

Produce sustainable beef products for initial test marketing efforts.

Upon achieving optimized and steady-state operations

at the Initial Project during 2022, coupled with obtaining an OMRI listing for its AD Nitrogen product, Bion expects to be ready to move

forward with its plans for development of much larger facilities.

The Company anticipates that discussions and negotiations regarding

potential JVs with strategic partners in the financial and livestock industries to develop large scale projects will commence during the

construction of the Initial Project.

Additionally, the Company believes there will also be opportunities to proceed with selected ‘retrofit

projects’

of existing facilities (see ‘Retrofit 3G Tech Project:

Kreider Poultry JV below as an example).

Bion intends to move forward on its one of its primary

commercial goals:

establishing JV’s for large scale projects that will produce both sustainable and sustainable-organic corn-fed

The products will be supported by a USDA PVP-certified sustainable brand that will, initially, highlight reductions in carbon and

nutrient footprint, as well as pathogen reductions associated with foodborne illness and antibiotic resistance, along with the organic

designation where appropriate.

Bion has successfully navigated the USDA PVP application process previously, having received conditional

approval of its 2G Tech platform, pending resubmission and final site audits, and is confident it will be successful in qualifying its

3G Tech platform.

Bion believes that

substantial unmet demand currently exists–

potentially very large –

for ‘real’

meat/ dairy/ egg products that

offer the verifiable/believable sustainability consumers seek, but with the taste and texture they have come to expect from American beef

and pork, dairy and poultry.

sufficient ammonium bicarbonate nitrogen fertilizer (“AD Nitrogen”) for commercial

testing by potential joint venture partners and/or purchasers and for university growth trials.

sustainable beef products for initial test marketing efforts.

On January 28, 2022 Bion Environmental Technologies,

(‘Bion’), on behalf of Bion 3G1 LLC (‘3G1’), a wholly-owned subsidiary, entered into a Purchase Order Agreement

with Buflovak and Hebeler Process Solutions (collectively ‘Buflovak’) in the amount of $2,665,500 (and made the initial 25%

payment ($665,375)) for the core of the ‘Bion System’ portion (without the crystallization modules which will be ordered and

fabricated pursuant to subsequent agreements) of the previously announced Gen3Tech Initial Project.

This Purchase Order encompasses the

core of Bion’s Gen3Technology.

On March 21, 2022 the Company received progress

notice re completion of certain work in process and an invoice from Buflovak for the next 25% payment ($665,375) which was paid

during the 2022 fiscal year.

On June 6, 2022, the Company received progress notice re completion of certain work in process and

an invoice from Buflovak for the third 25% payment ($665,375) which was paid on July 5, 2022 bringing

the aggregate payments to $1,996,125 as of the date of this report.

has worked with the Company on design and testing of its Gen3Tech over several years.

3G1 is working in concert with Integrated

Engineering Services, the primary site engineering firm for the facility, on the integration of all project components/modules at

the Initial Project site.

Additional agreements have been entered into various professional services providers (engineers,

surveyors, etc.) for work related to the Initial Project.

The Initial Project will be carried out in stages

with phase one focused on portions of items i.

set forth above.

Upon completing the primary goals of phase 1 of the

Initial Project (coupled with obtaining organic certifications(s) for our solid ammonium bicarbonate fertilizer product line),

Bion expects to be ready to move forward with its plans for development of much larger facilities including the Dalhart Project including

final design of its Gen3Tech modules.

The Company anticipates that discussions and negotiations it has begun (together with additional

opportunities that will be generated over the next 6-12 months) regarding potential JVs with strategic partners in the financial, livestock

and food distribution industries to develop large scale projects will continue during the development/construction of the Initial Project

with a 2023 goal of establishing multiple JV’s for large scale projects that will produce sustainable and/or sustainable-organic

corn-fed beef.

These products will be supported by a USDA PVP-certified sustainable brand that will, initially, highlight reductions in

carbon and nutrient footprint, as well as pathogen reductions associated with foodborne illness and antibiotic resistance, along with

the organic designation where appropriate.

Bion has successfully navigated the USDA PVP application process previously, having received

conditional approval of its 2G Tech platform (pending resubmission and final site audits), and is confident it will be successful in qualifying

its Gen3Tech platform.

After the basic technology start-up milestones of

the Initial Project (primarily optimization and steady-state operations of the core modules of our Gen3Tech platform) have been met, the

Company will determine whether to complete the entire Initial Project as originally designed at that location or the relocate the core

modules to an alternative permanent location.

The Company is in discussion with the University of Nebraska-Lincoln to jointly develop

an integrated beef facility based on Bion’s Gen3Tech and business model at its Klosterman Feedyard Innovation Center (“KFIC”)

(or other mutually agreed upon location) which facility will include innovative barns, an anaerobic digester and a Bion Gen3Tech system

to conduct ongoing research and development related thereto and the KFIC is a possible site for the long-term re-location of the core

This venture, if it moves forward, is anticipated to include joint preparation of applications for grants and other funding from

the USDA (‘climate smart’ program, rural development, etc.) and other sources.

The Company will also evaluate re-locating

the core module of the Initial Project to Dalhart, Texas, where it might be integrated into the first phases of the Dalhart Project.

The Company’s initial ammonium bicarbonate

liquid product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during

Applications for our first solid ammonium bicarbonate product line have been filed with OMRI, the California Department of

Food & Agriculture (“CDFA”) and the Iowa Organic Program (“IOP”) and are in the review processes (which is

likely to require an extended period of time and multiple procedural steps, in part due to the novel nature of our Gen3Tech in the context

of organic certifications).

See “ Organic Fertilizer Listing/Certification Process ” below.

Additionally, the Company believes there will

also be opportunities to proceed with selected ‘retrofit projects’ of existing facilities (see ‘ Gen3Tech Kreider

2 Poultry Project ’ below as an example) in the swine, dairy and poultry industries utilizing our Gen3Tech.

Bion believes that substantial unmet demand

currently exists– potentially very large – for ‘real’ meat/ dairy/ egg products that offer the

verifiable/believable sustainability consumers seek, but with the taste and texture they have come to expect from American beef and

pork, dairy and poultry.

Numerous studies demonstrate the U.S.

consumers’

preferences for sustainability.

For example, a 2019

NYU Stern’s Center for Sustainable Business study (https://hbr.org/2019/06/research-actually-consumers-do-buy-sustainable-products )

concluded that ‘products marketed as sustainable

grew 5.6 times faster than those that were not…’

and that ‘…in more than 90 percent of consumer-packaged-goods

(CPG) categories, sustainability-marketed products grew faster than their conventional counterparts.’

Sales growth of plant-based

alternatives, including both dairy and more recently ground meat (Beyond Meat, Impossible Foods, et al) have shown that a certain segment

of consumers are choosing seemingly sustainable offering, and are also willing to pay a premium for it.

Numerous studies also support

the consumers’

‘willingness-to-pay’

(WTP) for sustainable choices, including a recent meta-analysis of 80 worldwide

studies with results that calculate the overall WTP premium for sustainability is 29.5 percent on average (https://www.sciencedirect.com/science/article/abs/pii/S019566632100146X

consumers’ preferences for sustainability.

For example, 2019

NYU Stern’s Center for Sustainable Business study found that ‘products marketed as sustainable grew 5.6 times faster

than those that were not…’ and that ‘…in more than 90 percent of consumer-packaged-goods (CPG) categories,

sustainability-marketed products grew faster than their conventional counterparts.’ Sales growth of plant-based alternatives,

including both dairy and more recently ground meat (Beyond Meat, Impossible Foods, etc.) have shown that a certain segment of

consumers is choosing seemingly sustainable food product offerings, and are also willing to pay a premium for it.

Numerous studies

also support the consumers’ ‘willingness-to-pay’ (WTP) for sustainable choices, including a recent meta-analysis

of 80 worldwide studies with results that calculate the overall WTP premium for sustainability is 29.5 percent on average.

As one of the largest contributors to some of the

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opportunities we have to reduce negative environmental impacts of the food supply chain on air and water quality.

Bion’s 3G Tech

platform, along with its business model, enables the cleanup of the ‘dirtiest’

part of the food supply chain:

Bion’s Gen3Tech

platform, along with its business model, enables the cleanup of the ‘dirtiest’ part of the food supply chain:

animal protein

production and creates the opportunity to produce and market verifiably sustainable organic and conventional ‘real meat’

that can participate in the growth and premium pricing that appears to be readily available for the ‘right’

Bion believes the at least a premium segment of the

US beef industry (and potentially other livestock industry groups) is at the doorstep of a transformative opportunity to address the growing

demand for sustainable food product offerings, while pushing back against today’s anti-meat messaging.

production and creates the opportunity to produce and market verifiably sustainable organic and conventional ‘real meat’ products

that can participate in the growth and premium pricing that appears to be readily available for the ‘right’ products.

Gen3Tech Beef Business Model

Bion believes that at least a premium segment of the

beef industry (and potentially other livestock industry groups) is at the doorstep of a transformative opportunity to address the

growing demand for sustainable food product offerings, while pushing back against today’s anti-meat messaging.

At $66 billion/year

retail value), the beef industry is a fragmented, commodity industry whose practices date back decades.

In 1935 inflation-adjusted terms,

beef is 63% more expensive today, while pork and chicken, which are now primarily raised in covered barns, at CAFOs with highly integrated

supply chains, are 12% and 62% cheaper, respectively.

In recent years, the beef industry has come under increasing fire from advocacy

groups, regulatory agencies, institutional investors, and ultimately, their own consumers, over concerns that include climate change,

water pollution, food safety, and the treatment of animals and workers.

(2021 wholesale/farmgate value), the beef industry is a fragmented, commodity industry whose practices date back decades.

In 1935 inflation-adjusted

terms, beef is 63% more expensive today, while pork and chicken, which are now primarily raised in covered barns, at CAFOs with highly

integrated supply chains, are 12% and 62% cheaper, respectively.

In recent years, the beef industry has come under increasing fire

from advocacy groups, regulatory agencies, institutional investors, and ultimately, their own consumers, over concerns that include climate

change, water pollution, food safety, and the treatment of animals and workers.

Advocacy groups targeting livestock and the beef industry

have recently been joined by competitors that produce animal protein alternatives in seeking to exploit the industry’s environmental

and economic weaknesses.

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Nations Food and Agriculture Organization, a coordinated anti-meat messaging campaign has targeted consumers worldwide, primarily focused

on the industry’s impacts on climate change.

Meat alternatives, especially plant-based protein producers like Beyond Meat and Impossible

Foods, are being heavily promoted by themselves and the media, and have enjoyed steady sales growth.

A 2018 NielsenIQ Homescan survey

last year found that 39% of Americans are actively trying to eat more plant-based foods.

Some of the recent growth in plant-based proteins

results from increasing lactose intolerance and other health concerns;

however, most of that growth is attributed to consumers’

growing concerns for the environmental impacts of real meat and dairy.

Several large US companies that have traditionally focused on livestock

production, including Cargill, ADM, Perdue Foods, and Tyson, have recently entered the plant protein space.

In terms of changing customer

preferences, ‘saving the planet’

has proven to be a more compelling argument than the traditional animal activism/ welfare

To date, the only ‘industry response’

to this has been grass-fed beef, which is regarded as a generally more sustainable

offering than grain-fed.

However grass-fed beef has had only limited acceptance in U.S.

markets, because it is less flavorful and tougher

than the traditional corn-fed beef consumers have grown to enjoy.

Foods, are being heavily promoted by themselves and the media, and initially enjoyed steady sales growth until sales began flattening

over the past 12-18 months.

A 2018 NielsenIQ Homescan survey last year found that 39% of Americans are actively trying to eat more plant-based

Some of the recent growth in plant-based proteins results from increasing lactose intolerance and other health concerns;

most of that growth is attributed to consumers’ growing concerns for the environmental impacts of real meat and dairy.

Several large

US companies that have traditionally focused on livestock production, including Cargill, ADM, Perdue Foods, and Tyson, have recently entered

the plant protein space.

In terms of changing customer preferences, ‘saving the planet’ has proven to be a more compelling

argument than the traditional animal activism/ welfare pitch.

To date, the primary beef ‘industry response’ to this has been

grass-fed beef, which is regarded as a generally more sustainable offering than grain-fed (largely without empirical evidence) plus a

patina of initiatives invoking the vague term ‘regenerative’ agriculture.

However grass-fed beef has had only limited acceptance

markets, because it is less flavorful and tougher than the traditional corn-fed beef consumers have grown to enjoy.

It should be noted that these plant-based protein

producers are primarily expected to be able to serve the ground/ processed meat market, which represents only about 10 percent of the

overall animal protein market.

Further, there has recently been pushback to these plant-based products, focusing on their highly processed

nature and unproven health benefits, scalability/ pricing, and their uncertain carbon footprint.

There have also been several companies

recently enter the cellular and 3D-printed meat arena.

While facing myriad challenges and further out on the development timeline, some

people believe cellular agriculture (aka cultured, clean, lab-grown, cultivated) meat may have the potential to service a much larger

percentage of the market than plant-based protein, including cuts like steaks, chops and roasts, but the likely cost remains very uncertain

at this point.

Each of these items supports Bion’s belief that

there is a potentially very large opportunity to supply premium sustainable beef products that satisfy these concerns.

We believe that

the real meat/beef products that can be cost-effectively produced today using our 3G Tech platform, both sustainable and/or organic, can

provide an affordable product that satisfies the consumer’s desire for sustainability, but with the superior taste and texture those

consumers have grown to prefer.

producers are primarily expected to be able to serve the ground/ processed meat market, segment which represents only about 10 percent

of the overall animal protein market.

Further, there has recently been pushback to these plant-based products, focusing on their highly

processed nature and unproven health benefits, scalability/ pricing, and their uncertain carbon footprint.

There have also been several

companies recently enter the cellular and 3D-printed meat arena.

While facing myriad technical and economic challenges and further out

on the development timeline, some people believe cellular agriculture (aka cultured, clean, lab-grown, cultivated) meat may have the potential

to service a much larger percentage of the market than plant-based protein, including cuts like steaks, chops and roasts, but the likely

cost and timeline for availability remain very uncertain at this point.

Each of these items supports Bion’s belief that

there is a potentially very large opportunity to supply premium verifiably sustainable beef products that address these consumer concerns.

We believe that the real meat/beef products that can be cost-effectively produced today using our Gen3Tech platform, both sustainable

and/or sustainable organic, can provide an affordable product that satisfies the consumer’s desire for sustainability, while providing

the superior taste and texture those consumers have grown to prefer.

the beef industry has largely continued historic practices, the dairy industry has housed milk cows in barns and has been processing

cow waste through anaerobic digesters (ADs) to generate energy for years.

In recent years the renewable biogas (RNG) from the dairy ADs

has become increasingly lucrative due to related environmental

Bion‘s sustainable beef business model, based

on our Gen3Tech platform, will develop and operate large scale facilities that:

a) utilize custom designed barns which enable a more

controlled and monitored husbandry environment (and photovoltaic solar electricity generation utilizing the rooftops), b) with continual

manure transfer to ADs, c) which produce RNG and related environmental revenues, and d) then channel the AD waste (including CO2 recovered

from the RNG processing/cleanup) through a series of patented technologies to refine the waste into its various components.

below depicts a simplified facility schematic/flow chart:

This overall business model unites several interrelated

businesses driven by Bion’s technology and augments and aggregates multiple revenue streams as described below.

See “ Technology

and Technology Platform ” below for descriptions of the 4 major categories of products/revenue streams which Bion anticipates

from its Gen3Tech beef facilities:

a) premium ‘sustainable branded’ beef, b) renewable energy and energy/environmental/carbon-related

credits, c) organic fertilizer products and d) nutrient credits.

Sustainable Beef

Bion’s goal is to be first to market with meaningfully

sustainable, and verified, beef products that can be produced at sufficient scale to service national market demand.

The cattle produced

at a Bion facility will enjoy a substantially lower carbon footprint, dramatically reduced nutrient impacts to water, and an almost total

pathogen kill in the waste stream.

A Bion sustainable beef facility will be comprised of covered barns with slotted floors, which allow

the waste to pass through and be collected quickly and frequently to reduce ammonia volatilization and loss, as well as odors.

barns will reduce weather impacts on the livestock and have been demonstrated to promote improved general health and weight gain in the

cattle housed in them.

The barns represent a very large roof surface area, which will be utilized in appropriate geographical locations

for the installation of solar generation systems to produce electricity for the facility, as well as export to the grid.

Waste treatment

and resource recovery will be provided by Bion’s advanced 3G Tech platform, which Bion believes offers the most comprehensive solution

for livestock waste available today.

In addition to direct environmental benefits (described in more detail in Part I, Item 1 “Business”)

every pound of nitrogen that is captured, upcycled, and returned to the agricultural nitrogen cycle as high-quality fertilizer (vs lost

to contaminate downstream waters), is also a pound of nitrogen that will not have to be produced as synthetic urea or anhydrous ammonia,

with their tremendous carbon cost.

System performance and environmental benefits will be monitored and verified through third parties,

with USDA PVP certification of the sustainable brand that Bion also believes will be the most comprehensive available in the market.

Bion’s goal is to be first to market with meaningfully

verified sustainable beef products that can be produced at sufficient scale to service national market demand.

The cattle produced at

a Bion facility will have a substantially lower carbon footprint, dramatically reduced nutrient impacts to water and air, and an almost

total pathogen kill in the waste stream.

Further, the economics of producing these cattle (including the cost of the facility/technology

upgrade) will be greatly enhanced by the revenue realized from the recovery of valuable resources, including renewable energy, high-value

fertilizer products, and clean water.

A Bion sustainable beef facility (see diagram above)

will be comprised of covered barns with slotted floors (allowing the waste to pass through) which will reduce ammonia volatilization and

loss to the atmosphere, as well as odors, thereby improving animal health and human working conditions while preventing air/soil/water

The manure will be collected and moved directly to customized anaerobic digestion facilities which will produce renewable natural

gas (and re-cycle CO2 from the gas cleaning process).

Covered barns will reduce weather impacts on the livestock and have been demonstrated

to promote improved general health and weight gain in the cattle housed in them.

The barns’ very large roof surface area will be

utilized (in appropriate geographical locations) for the installation of photovoltaic solar generation systems to produce electricity

for the facility, as well as export to the grid.

The barn roofs will also be configured to capture rainwater, which, coupled with the

water recovered from the treatment process, will reduce the projects’ reliance on current water supplies.

Waste treatment and resource recovery will be provided

by Bion’s Gen3Tech platform, which Bion believes offers the most comprehensive solution for livestock waste available today.

addition to direct environmental benefits, every pound of nitrogen that is captured, upcycled, and returned to the agricultural nitrogen

cycle as high-quality fertilizer (vs lost to contaminate downstream waters), is also a pound of nitrogen that will not have to be produced

as synthetic urea or anhydrous ammonia, with their tremendous carbon cost.

System performance and environmental benefits will be monitored

and verified through third parties, with USDA PVP certification of the sustainable brand that Bion also believes will be the most comprehensive

available in the market.

Recently there have been efforts to establish sustainable

brands (including USDA PVP certification) for a number of small-scale livestock producers (largely in the grass fed beef category).

date, the reach and extent of such efforts is limited and it is difficult to determine their effectiveness.

Additionally, there have

been public announcements of initiatives related to beef sustainability (largely focused on the ‘cow-calf’ segment of the

livestock chain) in procurement by major beef processing companies, but a closer look finds that most consist largely of ‘green

washing’ public proclamations in the wake of environmental and social criticism that re-package prior initiatives and lack any significant

new substance.

At present, there is essentially no traceable and

verifiable ‘sustainable beef’ available to the US market except for niche products.

In response to consumer demand for transparency

and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver

these attributes in their products.

While we anticipate a faster adoption of tracking, verification and sustainability technologies in

other perishable food categories like produce and dairy due to their harvest and production techniques, meat industry leaders have also

announced their willingness to move forward with initiatives in this area.

Bion predicts that within approximately five years, consumers

will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the meat department.

Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three (3) years (end of

2025) and 25% in five (5) years (end of 2027) (approximately 2,000,000 cattle annually).

If Bion can successfully execute on its sustainable

beef business plan, facilities utilizing Bion’s Gen3Tech platform will provide one-third (1/3) or more of that of the premium market

segment (and a higher portion of meat that is actually traceable and verifiably sustainable).

Our goal is to have multiple sustainable

beef projects under development (within 3-5 distinct JVs) by the end of 2023.

Our first commercial project is likely to be the Dalhart

Project but we anticipate commencing additional sustainable beef projects during 2023 as well.

Our current target is to have at least

three (3) facility modules (15,000 head per module)(“Modules”) in development/under construction during 2023 in three (3)

different JVs with the initial barns being populated with livestock by fall/winter 2024-25.

Further expansion in the number of distinct

JVs is projected through 2025 aiming at 5-10 JVs in process --- each of which JVs will be pursuing development of multiple Modules --

with targets of 12-15 populated Modules by the end of 2025 (approximately 2%-3%% of the US beef market) and 30-45 Modules constructed

and populated by 2027-28 (approximately 6%-8% of the US beef market) with further expansion thereafter.

Bion’s current goal is that

its Gen3Tech platform will be utilized to produce 33% of the verifiable “sustainable beef” category at the end of the period

(which will equal approximately 2 million cattle annually)(45 Modules).

There is no assurance that the Company will reach

or approach the goals/targets set forth above.

Reaching such goals/targets will require access to very large amounts of capital (equity

and debt) as each module is projected to cost in excess of $50 million to construct and require mobilization of substantial personnel,

technical resources and management skills.

The Company does not possess either the financial or personnel resources required internally

and will need to source such resources from outside itself.

Some portion of which sustainable beef will likely

be organic (see below).

Sustainable Organic Beef

Bion believes it has a unique opportunity to produce,

at scale, affordable corn-fed organic beef that is certified as sustainable.

at scale, affordable corn-fed organic beef that is also certified as sustainable.

In addition to the sustainable practices described above,

organic-sourced beef cows would be finished on organic corn, which would be produced using the ammonium bicarbonate fertilizer captured

by the 3G Tech platform.

by the Gen3Tech platform.

Bion believes its meat products will meet consumer demands with respect to sustainability and safety (organic)

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largely unavailable in the market today.

We believe Bion’s unique ability to produce the fertilizer needed to grow a supply of low-cost

organic corn, and the resulting opportunity to produce organic beef, will dramatically differentiate us from potential competitors.

organic opportunity is dependent on successfully establishing Bion’s fertilizer products as acceptable for use in organic grain

Today, organic beef demand is limited and mostly supplied

with grass-fed cattle.

We believe Bion’s unique ability to produce the fertilizer needed to grow a supply of relatively

low-cost organic corn, and the resulting opportunity to produce organic beef, will dramatically differentiate us from potential competitors.

This organic opportunity is dependent on successfully establishing Bion’s fertilizer products as acceptable for use in organic grain

Today, organic beef demand is limited and mostly supplied with

grass-fed cattle.

While organic ground/ chopped meat has enjoyed success in U.S.

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mostly resulting from consumer issues with taste and texture.

In other words, it’s tough.

Regardless, such steaks sell for a significant

premium over conventional beef.

A corn-finished organic beef product is largely unavailable in the marketplace today due to the higher

costs of producing organic corn.

The exception is offerings that are very expensive from small ‘boutique’

beef producers.

A grain-finished organic beef product is largely unavailable in the marketplace today due to the higher

costs of producing organic corn and grain.

The exception is offerings that are very expensive from small ‘boutique’ beef

Like all plants, corn requires nitrogen to grow.

Corn is especially sensitive to a late-season application of readily available nitrogen

the key to maximizing yields.

With non-organic field corn, this nitrogen is supplied by an application of a low-cost synthetic

fertilizer, such as urea or anhydrous ammonia.

However, the cost for suitable nitrogen fertilizer that can be applied late-season in organic

corn production is so high that the late-season application becomes uneconomical, resulting in substantially lower yields –

recognized phenomena known as the ‘yield gap’

in organic production.

The yield gap results in higher costs for organic corn

that, in turn, make it uneconomical to feed that corn to livestock.

As is the case for sustainable but not organic beef, Bion believes

there is a potentially large unmet demand for affordable beef products that are both sustainable AND organic, but with the taste and texture

consumers have come to expect from American beef.

Bion’s ability to produce the low-cost nitrogen fertilizer that can close the

organic yield (and affordability) gap puts the company in a unique, if not exclusive at this time, position to participate in JV’s

that will benefit from this opportunity starting next year.

Corn is especially sensitive to a late-season application of readily available

nitrogen – the key to maximizing yields.

With non-organic field corn, this nitrogen is supplied by an application of a low-cost

synthetic fertilizer, such as urea or anhydrous ammonia.

However, the cost for suitable nitrogen fertilizer that can be applied late-season

in organic corn production is so high that the late-season application becomes uneconomical, resulting in substantially lower yields

– a widely recognized phenomena known as the ‘yield gap’ in organic production.

The yield gap results in higher costs

for organic corn that, in turn, make it uneconomical to feed that corn to livestock.

As is the case for sustainable but not organic beef,

Bion believes there is a potentially large unmet demand for affordable beef products that are both sustainable AND organic, but with

the taste and texture consumers have come to expect from American beef.

Bion’s ability to produce the low-cost nitrogen fertilizer

that can close the organic yield (and affordability) gap puts the Company in a unique, if not exclusive at this time, position to participate

in JV’s that will benefit from this opportunity starting next year.

The demonstrated willingness of consumers to purchase

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The consumer demand for sustainability appears to be a real and lasting

trend, but consumers remain skeptical of generalized claims of ‘sustainability’.

To date, a large portion of the industry

responses have been at a superficial level or consist of ‘green washing’, a deceptive marketing practice where companies promote

non-substantive initiatives.

Real sustainability for the livestock industry will require implementation of advanced waste treatment technology

at or near the livestock production facilities (“Concentrated Animal Feeding Operations”

or “CAFOs”) –

most of the negative environmental impacts take place.

responses to this trend have been at a superficial level or consist of ‘green washing’, a deceptive marketing practice where

companies promote non-substantive initiatives.

Real sustainability for the livestock industry will require implementation of advanced

waste treatment technology at or near the CAFOs – where most of the negative environmental impacts take place.

Organic Fertilizer Listing/Certification Process

The Company has focused a large portion of its activities

on developing, testing and demonstrating the 3rd generation of its technology and technology platform (“Gen3Tech”) with emphasis

on increasing the efficiency of production of valuable co-products from the waste treatment process, including ammonia nitrogen in the

form of low carbon and/or organically certified ammonium bicarbonate products.

The Company’s initial ammonium bicarbonate liquid

product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during May

Applications for our first solid form of concentrated

ammonia, soluble nitrogen fertilizer product line have been filed with OMRI (filed during May 2021), the Iowa Organic Program (“IOP”)(filed

during March 2022) and the California Department of Food & Agriculture (“CDFA”)(filed during May 2022) and are each in

the review process.

The review processes are requiring extended periods of time and multiple procedural steps with each entity in part

due to the novel nature of Bion’s Gen3Tech and our solid ammonium bicarbonate product in the context of organic certifications.

The OMRI application has proceeded through multiple stages of review and rebuttal/appeal without receiving a positive result to date.

The Company anticipates has recently filed a new appeal to the most recent determinations.

The Company’s CDFA has received initial

comments regarding our solid ammonium bicarbonate product line and we anticipate providing CDFA with the requested updated information

and clarifications during the next 60 days.

The Company’s product line is novel in part due to the fact that there is not a formal

listing category for a solid form of concentrated ammonia, soluble nitrogen fertilizers and there is no clear guidance at present from

internal policy manuals on how to categorize this product and the process that produced it.

There is also no clear guidance at present

from either the NOP or the National Organic Standards Board (“NOSB”) (which is currently involved in a related review and

recommendations process regarding ‘high nitrogen liquid fertilizers’ derived from ammonia from manure).

The Company and its

representatives, along with a number of other stakeholders, are involved in discussions regarding resolution of these matters at all three

The Company anticipates positive resolution of this matter with one or more listings/certifications of this product line well

prior to operational dates for the Company’s initial large scale JV Gen3Tech projects.

Gen3Tech Kreider 2 Poultry Project

Bion has done extensive pre-development work related

to a waste treatment/renewable energy production facility to treat the waste from KF’s approximately 6+ million chickens (planned

to expand to approximately 9-10 million) (and potentially other poultry operations and/or other waste streams) ('Kreider Renewable Energy

Facility' or ‘Kreider 2 Project’).

On May 5, 2016, the Company executed a stand-alone joint venture agreement (“JVA”)

with Kreider Farms covering all matters related to development and operation of Kreider 2 system to treat the waste streams from Kreider’s

poultry facilities in Bion PA2 LLC (“PA2”).

During May 2011 the PADEP certified a smaller version of the Kreider 2 Project

(utilizing our 2 nd generation technology) under the old EPA’s Chesapeake Bay model.

The Company anticipates that if and

when new designs are finalized utilizing our Gen3Tech, a larger Kreider 2 Project will be re-certified for a far larger number of credits

(management’s current estimates are between 2-4 million (or more) nutrient reduction credits for treatment of the waste stream from

Kreider’s poultry pursuant to the amended EPA Chesapeake Bay model and agreements between the EPA and PA).

Note that this Project

may also be expanded in the future to treat wastes from other local and regional CAFOs (poultry and/or dairy---including the Kreider Dairy)

and/or additional Kreider poultry expansion (some of which may not qualify for nutrient reduction credits).

The Company has commenced

discussions with Kreider Farms regarding updating the JVA to reflect the capabilities of our Gen3Tech platform and anticipates executing

an amended (or new) JVA during the current fiscal year.

The Company anticipates that if and when PA2 re-commences work on the Kreider

2 Project, it will submit a new application based on our Gen3Tech.

Site specific design and engineering work for this facility have not

commenced, and the Company does not yet have financing in place for the Kreider 2 Project.

This opportunity is being pursued through PA2.

If there are positive developments related to the market for nutrient reductions in Pennsylvania, of which there is no assurance, the

Company intends to pursue development, design and construction of the Kreider 2 Project with a goal of achieving operational status for

its initial modules during the following calendar year.

The economics (potential revenues and profitability) of the Kreider 2 Project,

despite its proposed use of Bion’s Gen3Tech for increased recovery of marketable by-products and sustainable branding, are based

in material part the long-term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake

Bay environmental clean-up.

However, liquidity in the Pennsylvania nutrient credit market has not yet developed significant breadth and

depth, which lack of liquidity has negatively impacted Bion’s business plans and will most likely delay PA2’s Kreider 2 Project

and other proposed projects in Pennsylvania.

Bion believes that the Kreider 2 Project and/or subsequent

Bion Projects in PA and the Chesapeake Bay Watershed will eventually generate revenue from the sale of:

a) nutrient reductions (credits

or in other form), b) renewable energy (and related credits), c) sales of fertilizer products, and/or d) potentially, in time, credits

for the reduction of greenhouse gas emissions, plus e) license fees/premiums related to a ‘sustainable brand’.

pandemic has delayed legislative efforts in Pennsylvania needed to commence its development.

However, the Company is currently engaged

in dialogue with the regional EPA office and the Chesapeake Bay Program Office regarding the potential of the Company’s Gen3Tech

Kreider2 Project (and other potential projects) to enable Pennsylvania to move forward toward meeting its Chesapeake Bay clean-up goals.

We believe that the potential market is very large, but it is not possible to predict the exact timing and/or magnitude of these potential

markets at this time.

Technology Deployment:

Bion Gen3Tech

Widespread deployment of waste treatment technology,

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costs associated with technology adoption.

Bion’s 3G Tech has been developed to create opportunities for such augmented revenue

streams, while providing third party verification of sustainability claims.

The 3G Tech platform has been designed to maximize the value

of co-products produced during the waste treatment/recovery processes, including pipeline-quality renewable natural gas (biogas) and commercial

fertilizer products approved for organic production.

All processes will be verifiable by third parties (including regulatory authorities

and certifying boards) to comply with environmental regulations and trading programs and meet the requirements for:

a) renewable energy

and carbon credits, b) organic certification of the fertilizer coproducts and c) USDA PVP certification of an ‘Environmentally Sustainable’

brand (see discussion below), and d) payment for verified ecosystem services.

The Company’s first patent on its 3G Tech was issued

In August 2020, the Company received a Notice of Allowance on its third patent which significantly expands the breadth and

depth of the Company’s 3G Tech coverage, and the Company has additional applications pending and/or planned (See “Patents”).

Bion’s business model and technology platform

can create the opportunity for JVs (in various contractual forms) between the Company and large livestock/food/fertilizer industry participants,

based upon the supplemental cash flow generated by implementation of our 3G Tech business model, which will support the costs of technology

implementation (including related debt).

We anticipate this will result in long term value for Bion.

In the context of such JVs, we believe

that the verifiable sustainable branding opportunities (conventional and organic) may expand to represent the single largest enhanced

revenue contributor provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business with

be conducted through such JVs, but a material portion may involve licensing and or other approaches.

Bion’s Gen3Tech business platform has been developed to create opportunities for such

augmented revenue streams, while providing third party verification of sustainability claims.

The Gen3Tech platform has been designed

to maximize the value of co-products produced during the waste treatment/recovery processes, including pipeline-quality renewable natural

gas (biogas) and commercial fertilizer products approved for organic production.

All processes will be verifiable by third parties (including

regulatory authorities and certifying boards) to comply with environmental regulations and trading programs and meet the requirements

a) renewable energy and carbon credits, b) organic certification of the fertilizer coproducts and c) USDA PVP certification of an

‘Environmentally Sustainable’ brand (see discussion below), and d) payment for verified ecosystem services.

The Company’s

first patent on its Gen3Tech was issued during 2018.

In August 2020, the Company received a Notice of Allowance on its third patent which

significantly expands the breadth and depth of the Company’s Gen3Tech coverage, and the Company has additional applications pending

and/or planned.

Bion’s business model and technology

platform can create the opportunity for joint ventures s (in various contractual forms) (“JVs”) between the Company and

large livestock/food/fertilizer industry participants based upon the supplemental cash flow generated by implementation of our

Gen3Tech business model, which cash flows will support the costs of technology implementation (including servicing related debt).

anticipate this will result in substantial long term value for Bion.

In the context of such JVs, we believe that the verifiable

sustainable branding opportunities (conventional and organic) in meat will represent the single largest enhanced revenue contributor

provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business with be conducted

through such JVs, but a material portion may involve licensing and or other approaches.

In parallel with technology development, Bion has

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nutrient and carbon reduction strategy.

These market-driven strategies can generate “payment for ecosystem services”,

in which farmers or landowners are rewarded for managing their land and operations to provide environmental benefits that will generate

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Another such strategy is nutrient trading (or water quality trading), which will potentially create markets (in Pennsylvania and other

states) that will utilize taxpayer funding for the purchase of verified pollution reductions from agriculture (“nutrient credits”)

by the state (or others) through competitively-bid procurement programs.

Such credits can then be used as a ‘qualified offset’

by an individual state (or municipality) to meet its federal clean water mandates at significantly lower cost to the taxpayer.

Market-driven

strategies, including competitive procurement of verified credits, is supported by US EPA, the Chesapeake Bay Commission, national livestock

strategies, including competitive procurement of verified credits, is supported by U.S.

EPA, the Chesapeake Bay Commission, national livestock

interests, and other key stakeholders.

Legislation in PA to establish the first such state competitive procurement program passed the

Pennsylvania Senate by a bi-partisan majority during March 2019.

However, the Covid-19 pandemic and related financial/budgetary crises

have slowed progress for this and other policy initiatives and, as a result, it is not currently possible to project the timeline for

completion (or meaningful progress) of this and other similar initiatives (see discussion below).

Legislation in Pennsylvania to establish the first such state competitive procurement program passed

the Pennsylvania Senate by a bi-partisan majority during March 2019 but has not yet crossed the hurdles required for actual adoption.

The Covid-19 pandemic and related financial/budgetary crises have slowed progress for this and other policy initiatives and, as a result,

it is not currently possible to project the timeline for completion (or meaningful progress) of this and other similar initiatives (see

discussion below).

The livestock industry and its markets are already

with a commercial-ready technology and business model, Bion believes it has a ‘first-mover advantage’

that will seek to exploit the opportunities that will arise from the industry’s inevitable transformation.

With our commercial-ready technology and business model, Bion believes it has a ‘first-mover advantage’ over others

that will seek to exploit the opportunities that will arise from the industry’s inevitable transformation.

Bion anticipates moving

forward with the development process of its initial commercial installations utilizing its 3G Tech, during the current 2022 fiscal year.

We believe that Bion’s 3G Tech platform and business model can provide a pathway to true economic and environmental sustainability

with ‘win-win’

benefits for at least a premium sector of the livestock industry, the environment, and the consumer, an opportunity

forward with the development process of its initial commercial installations utilizing its Gen3Tech, during the current 2023 fiscal year.

We believe that Bion’s Gen3Tech platform and business model can provide a pathway to true economic and environmental sustainability

with ‘win-win’ benefits for at least a premium sector of the livestock industry, the environment, and the consumer, an opportunity

which the Company intends to pursue.

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The livestock industry is under tremendous pressure

from regulatory agencies, a wide range of advocacy groups, institutional investors and the industry’s own consumers all of whom

a pushing the industry to adopt sustainable practices.

Environmental cleanup is inevitable and has already begun - and policies have already

begun to change.

Bion’s 3G Tech was developed for implementation on large scale livestock production facilities, where scale can

drive both lower treatment costs and efficient co-products production, while producing dramatic environmental improvements.

that scale, coupled with Bion’s verifiable treatment technology platform, will create a transformational opportunity to integrate

clean production practices at (or close to) the point of livestock production—the primary source of the industry’s environmental

Bion intends to assist the forward-looking segment of the livestock industry to bring animal protein production in line with

21st Century consumer demands for meaningful, verifiable and believable sustainability.

(according to the USDA’s 2017 agricultural

census) there are over 9M dairy cows, 90M beef cattle, 60M swine and more than 2 billion poultry which provides an indication of both

the scope of the problem, as well as the size of the opportunity that can be addressed by Bion’s technology.

Environmental impacts

from livestock production include surface- and groundwater pollution, greenhouse gas emissions, ammonia, and other air pollution, excess

water use, and pathogens related to foodborne illnesses and antibiotic resistance.

While the most visible and immediate problems are related

to nutrient runoff and its effects on water quality, the industry has recently been targeted by various stakeholder groups for its impacts

on climate change.

The greatest impacts come from the manure waste.

of total annual U.S.

livestock manure waste vary widely, but start around a billion tons, between 100 and 130 times greater than human

However, while human waste is generally treated by septic or municipal wastewater plants, livestock waste –

raw manure –

is spread on our nation’s croplands for its fertilizer value.

from regulatory agencies, a wide range of advocacy groups, institutional investors and the industry’s own consumers, to adopt sustainable

Environmental cleanup is inevitable and has already begun - and policies have already begun to change, as well.

Gen3Tech was developed for implementation on large scale livestock production facilities, where scale drives both lower treatment costs

and efficient co-products production, as well as dramatic environmental improvements.

We believe that scale, coupled with Bion’s

verifiable treatment technology platform, will create a transformational opportunity to integrate clean production practices at (or close

to) the point of production—the primary source of the industry’s environmental impacts.

Bion intends to assist the forward-looking

segment of the livestock industry to bring animal protein production in line with 21st Century consumer demands for meaningful sustainability.

(according to the USDA’s 2017 agricultural

census) there are over 9 million dairy cows, 90 million beef cattle, 60 million swine and more than 2 billion poultry which provides an

indication of both the scope of the problem addressed by Bion’s technology, as well as the size of Bion’s opportunity.

Environmental

impacts from livestock production include surface and groundwater pollution, greenhouse gas emissions, ammonia, and other air pollution,

excess water use, and pathogens related to foodborne illnesses and antibiotic resistance.

While the most visible and immediate problems

are related to nutrient runoff and its effects on water quality, the industry has recently been targeted by various stakeholder groups

for its impacts on climate change.

Estimates of total annual U.S.

livestock manure waste

vary widely, but start around a billion tons, between 100 and 130 times greater than human waste.

However, while human waste is generally

treated by septic or municipal wastewater plants, livestock waste – raw manure – is spread on our nation’s croplands

for its fertilizer value.

Large portions of U.S.

feed crop production (and most organic crop

production) is fertilized, in part, in this manner.

Under current manure management practices, 80% or more of total nitrogen is lost from

manure during storage, transportation, and after soil application.

Runoff from livestock waste has been identified as one of the largest

sources of excess nutrients in most major watersheds.

Excess nutrients fuel algae blooms nationwide that are increasingly toxic and fuel

dead zones in the Great Lakes, Chesapeake Bay, and Gulf of Mexico.

Nitrate-contaminated drinking water is a problem in a growing number

of states including Pennsylvania, California, Wisconsin, Washington and others.

US EPA considers excess nutrients “one of America’s

most widespread, costly and challenging environmental problems”.

Nutrient runoff is expected to worsen with rising temperatures

and increasing rainstorm intensity resulting from climate change.

feed crop production (and most organic crop production) are fertilized, in part, in this

Under current manure management practices, 80% or more of total nitrogen from manure, much of it in the form of ammonia, escapes

during storage, transportation, and during and after soil application, representing both substantial lost value and environmental costs.

More than half of the nitrogen impacts from livestock

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Airborne ammonia nitrogen eventually settles

back to the ground through atmospheric deposition - it ‘rains’

back to the ground through atmospheric deposition - it ‘rains’ everywhere.

While some of this nitrogen is captured and used

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It is now well-established that most of the

voluntary conservation practices, such as vegetated buffers that ‘filter’

runoff (often referred to as “BMPs”

or “Best Management Practices”

that have traditionally been implemented to attempt to mitigate nutrient runoff), are considerably

voluntary conservation practices, such as vegetated buffers that ‘filter’ runoff (often referred to as “BMPs”

or “Best Management Practices” that have traditionally been implemented to attempt to mitigate nutrient runoff), are considerably

less effective than was previously believed to be the case.

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Over the last

decade, algae blooms have become increasingly toxic to both humans and animals, such as the Red Tides on the Florida and California coasts,

and the Lake Erie algae bloom that cut off the water supply to Toledo, Ohio, residents in 2014.

When the nutrient runoff subsides, it

leaves the algae blooms with no more ‘food’

and the blooms die.

The algae’s decomposition takes oxygen from the water,

leading to ‘dead zones’

in local ponds, lakes, and ultimately, the Great Lakes, as well as the Chesapeake Bay, Gulf of Mexico,

several years, algae blooms have become increasingly toxic to both humans and animals, such as the Red Tides on the Florida and California

coasts, and the Lake Erie algae bloom that cut off the water supply to Toledo, Ohio, residents in 2014.

When the nutrient runoff subsides,

it leaves the algae blooms with no more ‘food’ and the blooms die.

The algae’s decomposition takes oxygen from the water,

leading to ‘dead zones’ in local ponds, lakes, and ultimately, the Great Lakes, as well as the Chesapeake Bay, Gulf of Mexico,

and other estuary waters.

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higher mammals, including dolphins and manatees.

US EPA already considers excess nutrients “one of America’s most widespread,

costly and challenging environmental problems”.

EPA already considers excess nutrients “one of America’s most widespread,

costly and challenging environmental problems”.

Nutrient runoff is expected to worsen dramatically in the coming decades due to

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however, private drinking water

wells are not regulated, and it is the owners’

responsibility to test and treat their wells.

wells are not regulated, and it is the owners’ responsibility to test and treat their wells.

Additionally, groundwater flows also

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be cost-effectively controlled and treated at the source-- before it has a chance to escape into the environment where it becomes extremely

expensive to ‘chase’, capture and treat.

High phosphorus concentrations in soils fertilized

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The ratio of nitrogen to phosphorus in livestock waste is fixed, and because manure application

rates are calculated based on nitrogen requirements, often phosphorus is over-applied as an unintended consequence.

rates are calculated based on nitrogen requirements, often phosphorus is overapplied as an unintended consequence.

Phosphorus accumulation

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Decoupling the nitrogen from the phosphorus would allow them to be precision-applied, independently of each other, when and where needed.

The impacts of livestock production on public health

and the environment are coming under increasing scrutiny from environmental groups and health organizations, regulatory agencies and the

courts, the media, consumers and activist institutional investors.

The livestock industry has recently come under heavy fire for its impacts

on climate change, which has become a rallying cry for the anti-meat campaign discussed above.

Estimates of the magnitude of those impacts

vary widely, but the general consensus is that globally, livestock account for 14.5 percent of greenhouse emissions.

that number drops to 4.2 percent, due to the increased efficiencies of American beef production.

The greatest impacts come from direct

emissions of methane from enteric fermentation (belches), methane and nitrous oxide emissions from the manure, with arguably the largest

being the massive carbon footprint of the synthetic nitrogen fertilizers used to grow the grains to feed the livestock.

The livestock industry has recently come under heavy

fire for its impacts on climate change, which has become a rallying cry for the anti-meat campaign discussed above.

Estimates of the magnitude

of those impacts vary widely, but the general consensus is that globally, livestock account for 14.5 percent of greenhouse emissions.

however, that number drops to 4.2 percent, due to the increased efficiencies of American beef production.

The greatest impacts

come from direct emissions of methane from enteric fermentation (belches), methane and nitrous oxide emissions from the manure, with arguably

the largest being the massive carbon footprint of the synthetic nitrogen fertilizers used to grow the grains to feed the livestock.

For decades the livestock industry has overlooked

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share to plant-based protein and other alternative products.

Bion’s 3G Tech platform was designed to resolve these environmental

Bion’s Gen3Tech platform was designed to resolve these environmental

issues and bring the industry in line with twenty-first century consumer expectations.

Technology and Technology Platform

Bion has invested years of work and substantial capital

on the development of our technology and technology platform since 1989.

The predecessor to Bion’s 3G Tech platform, our patented

second-generation technology (“2G Tech”), was proven at commercial scale and was reviewed and qualified for federal loan guarantees

under USDA’s Technical Assessment program.

Bion’s 2G Tech dairy project (“Kreider 1”

or “KF1”), located

at Kreider Farms in Pennsylvania (“PA”) received the first verified /measurable nutrient reduction credits from a non-point

source livestock facility in the U.S.

and its nutrient reductions were verified by the Pennsylvania Department of Environmental Protection

(“DEP”) during 2012.

A key attribute of Bion’s 2G Tech (now supplanted

by our 3G Tech) was that nutrient and other pollution reductions could be measured, providing a level of verification on par with a

municipal wastewater treatment plant, which created the opportunity for the nutrient reductions to be used as “qualified offsets”

to EPA-mandated requirements.

While it was an engineering success, Kreider 1 has failed financially because the 2G Tech platform was almost

wholly dependent for revenue from anticipated demand for nutrient credits, based on PA’s mandated nitrogen reductions under the

Chesapeake Bay Strategy and their proposed nutrient trading program that failed to materialize.

Bion began development of its 3G Tech

platform when it became apparent there was significant opposition to the trading program (and private sector participation in clean water

activities, generally) from entrenched clean water interests.

The Company is no longer implementing Projects based on its 2G Tech and

the Kreider 1 project has been shut down.

Bion’s 3G Tech was developed to avoid the dependence

Bion has invested decades of work and substantial

capital on the development of our technology and technology platform since 1989.

The predecessor to Bion’s Gen3Tech platform, our

patented second-generation technology (“2G Tech”), was proven at commercial scale and was reviewed and qualified for federal

loan guarantees under USDA’s Technical Assessment program.

Bion’s 2G Tech dairy project (“Kreider 1” or “KF1”),

located at Kreider Farms in Pennsylvania (“PA”) received the first verified /measurable nutrient reduction credits from a

non-point source livestock facility in the U.S.

and its nutrient reductions were verified by the Pennsylvania Department of Environmental

Protection (“DEP”) during 2012.

A key attribute of Bion’s 2G Tech (now

supplanted by our Gen3Tech) was that nutrient and other pollution reductions could be measured, providing a level of verification on

par with a municipal wastewater treatment plant, which created the opportunity for the nutrient reductions to be used as

“qualified offsets” to EPA-mandated requirements.

While it was an engineering success, Kreider 1 has failed financially

because the 2G Tech platform was almost wholly dependent for revenue from anticipated demand for nutrient credits, based on

PA’s mandated nitrogen reductions under the Chesapeake Bay Strategy and their proposed nutrient trading program that did not materialize.

Bion began development of its Gen3Tech platform when it became apparent there was significant opposition to

the trading program (and private sector participation in clean water activities, generally) from entrenched clean water interests.

The Company is no longer implementing Projects based on its 2G Tech and the Kreider 1 project has been shut down.

Bion’s Gen3Tech was developed to avoid the dependence

of our 2G Tech systems on the sale of water quality trading credits in order to develop profitable projects.

The 3G Tech platform has

The Gen3Tech platform has

been designed to maximize revenues from co-products, including biogas and fertilizer products, achieve premium pricing from USDA PVP-certified

‘environmentally sustainable’

retail branding of the animal protein products it supports, as well as generate verified credits

‘environmentally sustainable’ retail branding of the animal protein products it supports, as well as generate verified credits

for still-developing water quality trading programs.

The first patent on the 3G Tech was filed in 2015 for an ammonia recovery process

The first patent on the Gen3Tech was filed in 2015 for an ammonia recovery process

that produces ammonium bicarbonate (a commercial fertilizer) without external chemical additives, thereby providing the basis for organic

certification.

A Notice of Allowance from the US Patent and Trademark Office (“USPTO”) was received during August 2018 related

to this patent application and the patent was subsequently issued.

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During August 2020 the Company received

a Notice of Allowance’

for our third patent related to our 3G Tech and additional related applications are pending and/or planned

(See “Patents”.) The 3G Tech platform incorporates Bion’s patented and proprietary technology while utilizing existing

commercial evaporation and distillation process equipment (with decades of reliability and service history) that is customized for Bion’s

a Notice of Allowance’ for our third patent related to our Gen3Tech and additional related applications are pending and/or planned

(See “Patents”.) The Gen3Tech platform incorporates Bion’s patented and proprietary technology while utilizing existing

commercial evaporation and distillation process equipment (with decades of reliability and service history) that is customized for Bion’s

specific applications.

The 3G Tech platform is the basis for a JV business

model with four distinct revenue streams :

1) pipeline quality renewable natural gas and related carbon and other environmental credits,

2) premium organic fertilizer products, 3) nutrient credits, and 4) premium pricing from USDA PVP-certified ‘Environmentally Sustainable’

branding at the retail level.

Carbon and nutrient credit revenues will be supported by third-party verification of the waste treatment

processes that simultaneously capture methane and nutrients, while producing renewable energy and fertilizer products from them with relatively

Our Gen3Tech platform is the basis for a JV

business model with four primary distinct revenue streams :

1) pipeline quality renewable natural gas and related carbon and

other environmental credits, 2) premium organic fertilizer products, 3) nutrient reduction credits, and 4) premium pricing/license

fees for verifiably sustainable, USDA PVP-certified ‘Environmentally Sustainable’ branded meat at the retail level.

Carbon and nutrient credit revenues will be supported by third-party verification of the waste treatment processes that

simultaneously capture methane and nutrients, while producing renewable energy and fertilizer products from them with relatively

limited incremental cost to Bion.

The same verified data will also provide the backbone for the USDA PVP-certified sustainable brand,

again with limited incremental cost.

The same verified data will also provide the backbone for the USDA PVP-certified sustainable

brand, again with limited incremental cost.

Renewable energy- and carbon-related credits:

Bion’s 3G Tech platform utilizes

customized anaerobic digestion (“AD”) to recover biogas (methane) from the waste stream.

At sufficient scale, methane produced

from AD can be cost-effectively conditioned, compressed and injected into a pipeline.

The US Renewable Fuel Standard (“RFS”)

program and state programs in California and elsewhere provide ongoing renewable energy credits for the production of biogas and its subsequent

use as a renewable transportation fuel.

Additional renewable energy-related credit programs are being developed that Bion believes will

impact these revenues, including a Carbon Intensity (CI) score that measures the amount of carbon produced per unit of energy produced.

Bion’s Gen3Tech platform utilizes anaerobic digestion (“AD”)

customized to maximize recovery of biogas (methane) (and ammonia nitrogen components) from the waste stream.

At sufficient scale, methane

produced from AD can be cost-effectively conditioned/cleaned, compressed and injected into a pipeline.

The US Renewable Fuel Standard

(“RFS”) program and state programs in California and elsewhere provide ongoing renewable energy credits for the production

of biogas and its subsequent use as a renewable transportation fuel.

The CO2 recovered in the gas cleaning process will be recycled for

use in the production of organic fertilizer products along with the ammonia-rich digestate.

Gen3Tech facilities will also generate photovoltaic

(solar) electricity from modules placed on the roofs of the barns (approximately 12 acres of rooftop per 15,000 head of cattle module).

Additional renewable energy-related credit programs are being developed that Bion believes will impact these revenues, including a Carbon

Intensity (CI) score that measures the amount of carbon produced per unit of energy produced.

Organic Fertilizer products:

The 3G Tech platform has been designed to

produce multiple fertilizer products, including:

i) ammonium bicarbonate liquid, ii) ammonium bicarbonate in solid crystal form –

AD Nitrogen –

and iii) soil amendment products that will contain the remaining nitrogen, phosphorus and other micronutrients captured

The Gen3Tech platform has been designed to

produce multiple fertilizer products from the ammonia-rich digestate, including:

i) ammonium bicarbonate liquid, ii) ammonium bicarbonate

in solid crystal form and iii) soil amendment products that will contain the remaining nitrogen, phosphorus and other micronutrients captured

from the livestock waste stream.

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chemical processes, has a long history of use as a fertilizer.

Bion’s has developed solid ammonium bicarbonate products containing

Bion’s Gen3Tech recovers solid ammonium bicarbonate products containing

18-22 percent nitrogen in a crystalline form that is easily transported, is water soluble and provides a readily available nitrogen source

The products will contain virtually none of the other salt, iron and mineral constituents of the livestock waste stream that

often accompany other organic fertilizers.

This product is being developed to fertilizer industry standards so that it that can be precision-applied

to crops using existing equipment.

Bion believes that this product will potentially have broad applications in the production of organic

grains for livestock feed, row crops, horticulture, greenhouse and hydroponic production, and potentially retail lawn and garden products.

The AD Nitrogen and other ammonium bicarbonate

products produced by Bion’s 3G Tech platform will enjoy a dramatically lower carbon footprint than synthetic fertilizers.

nitrogen captured and upcycled into AD Nitrogen was going to be lost through volatilization and runoff, and that loss would generally

need to be offset with a synthetic nitrogen, such as anhydrous ammonia or urea.

These synthetic nitrogen products are produced through

the Haber-Bosch (and other) synthetic processes, which converts hydrogen and atmospheric nitrogen to ammonia, with methane as the energy

It is an extremely energy-intensive process with a carbon footprint that , while not yet fully understood, is widely accepted

to by very large.

While a complete Life Cycle Analysis (LCA) of carbon impacts from synthetic fertilizer production is not available,

according to the Institute for Industrial Productivity, its production alone is responsible for approximately 1 percent of total global

CO2 emissions.

To the extent that Bion can capture and repurpose the nitrogen traditionally lost from livestock waste, that carbon cost

will no longer need to be paid

The Company’s initial low concentration

This product line will contain virtually none of the other salt, iron and mineral constituents of the livestock waste stream

that often accompany other organic fertilizers.

This product is being developed to fertilizer industry standards so that it that can be

precision-applied to crops using existing equipment.

Bion believes that this product will potentially have broad applications in the production

of organic grains for livestock feed, row crops, horticulture, greenhouse and hydroponic production, and potentially retail lawn and garden

The ammonium bicarbonate products produced

by Bion’s Gen3Tech platform will enjoy a dramatically lower carbon footprint than synthetic fertilizers.

The reactive nitrogen captured

and upcycled into our fertilizer products was going to be lost through volatilization and runoff, and that loss would generally need to

be offset with a synthetic nitrogen, such as anhydrous ammonia or urea.

These synthetic nitrogen products are produced through the Haber-Bosch

(and other) synthetic processes, which converts hydrogen and atmospheric nitrogen to ammonia, with methane as the energy source.

an extremely energy-intensive process with a carbon footprint that, while not yet fully understood, is widely accepted to by very large.

While a complete Life Cycle Analysis (LCA) of carbon impacts from synthetic fertilizer production is not available, according to the Institute

for Industrial Productivity, its production alone is responsible for approximately 1 percent of total global CO2 emissions.

To the extent

that Bion can capture and repurpose the nitrogen traditionally lost from livestock waste, that carbon cost will no longer need to be paid.

The Company’s initial low concentration

ammonium bicarbonate liquid product completed its OMRI application and review process with approval during May 2020.

Bion’s second

application to OMRI, for its initial solid AD Nitrogen product, was filed during May 2021and is currently being reviewed.

Applications to OMRI,

the California Department of Food and Agriculture (“CDFA”) and the Iowa Organic Program have been filed by the Company for

its initial solid concentrated ammonium bicarbonate nitrogen and are currently being reviewed.

To provide a first level degree of clarity

regarding organic approvals and the processes/procedures involved, Bion believes that the initial OMRI approval is of importance, because

subsequent organic products that are produced by using the very same technology platform (our 3G Tech) can now piggyback on the initial

approval to a significant degree.

Note that there are different layers to the U.S.

organic program and that fertilizers do not get ‘certified’

as organic, per se.

Rather, they are evaluated to determine if they are acceptable for ‘use in organic production’.

The National Organic Program (“NOP”)

was established by Congress in 2001 under the USDA’s Agricultural Marketing Service.

our solid organic products are produced by using the very same technology platform (our Gen3Tech).

Note that there are different layers

organic program and that fertilizers do not get ‘certified’ as organic, per se.

Rather, they are evaluated to

determine if they are acceptable for ‘use in organic production’.

The National Organic Program (“NOP”)

was established by Congress in 2001 under the USDA’s Agricultural Marketing Service.

The NOP develops and enforces uniform national

standards for organically- produced agricultural end products –

meat/dairy/milk, fruits, vegetables –

sold in the United

Operating as a public-private partnership, NOP accredits private companies and helps train their inspectors (USDA-accredited Certifiers)

to certify that farms and businesses meet the national organic standards.

For example, in a potential Midwest organic beef project (discussed

below), each element in the supply chain must provide their certifying agent’s certification that the specific product, such as

organic corn, has been produced in accordance with their organic plan.

The end product - the beef - would be USDA-certified as organic

by an accredited Certifier after a review of ALL the farming practices and inputs (which would include Bion’s ammonium bicarbonate

OMRI is a nonprofit organization that

provides an independent review of products, such as fertilizers, pest controls, livestock health care products, and numerous other inputs

that are intended for use in certified organic production and processing.

OMRI reviews these products against the organic standards established

by the NOP to determine if they are suitable for use in organic production.

Acceptable products are then OMRI Listed®.

standards for organically-produced agricultural end products – meat/dairy/milk, fruits, vegetables – sold in the United

Operating as a public-private partnership, NOP accredits private companies and helps train their inspectors (USDA-accredited

Certifiers) to certify that farms and businesses meet the national organic standards.

For example, in a potential Midwest organic beef

project, each element in the supply chain must provide their certifying agent’s certification that the specific

product, such as organic corn, has been produced in accordance with their organic plan.

The end product - the beef - would be USDA-certified

as organic by an accredited Certifier after a review of ALL the farming practices and inputs (which would include Bion’s ammonium

bicarbonate fertilizer).

OMRI enables a national listing thru

one application versus the alternative of using certifiers to secure listings in individual states.

To those who wish to sell organic

fertilizers into national distribution channels, an OMRI listing provides nearly uniform acceptance in the U.S.

The OMRI listing Bion

received in May was for our initial commercial product, a low-concentration liquid ammonia.

It is valid ONLY for that particular product.

For future Bion product offerings using the same technology platform, Bion will either need to file for specific state approval, or file

with OMRI for a national listing, or a combination of the two.

one application versus the alternative of using certifiers to secure listings in individual states and regions.

To those who wish to sell

organic fertilizers into national distribution channels, an OMRI listing provides nearly uniform acceptance in the U.S.

The OMRI listing

Bion received in May was for our initial commercial product, a low-concentration liquid ammonia.

It is valid ONLY for that particular

For future Bion product offerings using the same technology platform, Bion will either need to file for specific state approval,

or file for a national listing, or a combination of the two.

Bion may elect to use an individual state listing initially to be followed

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The overarching standard of organic

production, per NOP guidelines, is that a “product shall have been produced and handled without the use of synthetic chemicals…”

That is rule Number One.

At NOP, the term "synthetic"

means “a substance that is formulated or manufactured by a chemical

At NOP, the term "synthetic" means “a substance that is formulated or manufactured by a chemical

process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or mineral sources, except

that such term shall not apply to substances created by naturally occurring biological processes.”

In evaluating and approving Bion’s

liquid ammonia for OMRI listing, Bion’s patented ammonia recovery system was not deemed synthetic.

that such term shall not apply to substances created by naturally occurring biological processes.” In evaluating and approving Bion’s

liquid ammonia for OMRI listing, Bion’s patented ammonia recovery system was not deemed synthetic.

That is an important distinction

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Based on preliminary market surveys to date, we believe that existing competing organic fertilizer products in both liquid and granular

form are being sold presently at price points significantly greater than Bion’s projected cost and projected pricing.

We also believe

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nitrogen and phosphorus) from the livestock waste stream, will become available in multiple states over the next several years.

in the Pennsylvania (“PA”) Senate of key legislation –

SB 575 –

in June 2019 that would have established a competitively-bid

in the Pennsylvania (“PA”) Senate of key legislation – SB 575 – in June 2019 that would have established a competitively-bid

market for nutrient credits in PA, is indicative of the trends.

Despite the fact that the bill was not considered in the House, due to

the Covid-19 pandemic (a re-introduced bill will have to be considered again in the current and/or future sessions (currently SB 475 and

SB 832 have been introduced and are pending), Bion anticipates that after passage of a similar bill in the future, PA will establish a

the Covid-19 pandemic (a re-introduced bill will have to be considered again in the current and/or future sessions, Bion anticipates that after passage of a similar bill in the future, PA will establish a

competitively-bid market for nutrient credits within twelve months after legislative passage and being signed into law by the Governor.

See “Policy Change is Coming”

and “Kreider Poultry Joint Venture and Pennsylvania and Chesapeake Bay Initiatives”

See “Policy Change is Coming” and “Kreider Poultry Joint Venture and Pennsylvania and Chesapeake Bay Initiatives”

below for discussion of the history and status of matters in PA.

Note, however, that the current Covid-19

pandemic and resultant social and economic crises and budgetary constraints have delayed policy initiatives related to these matters at

both the state and federal levels.

As a result, it is not currently possible to reasonably project a timetable for adoption of the policy

changes discussed herein.

Note, however, that the Covid-19

pandemic and resultant social and economic crises and budgetary constraints have delayed policy initiatives related to these matters

at both the state and federal levels.

As a result, it is not currently possible to reasonably project a timetable for adoption of the

policy changes discussed herein.

Sustainable Branding:

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to pay a premium for their safe and sustainable food choices.

Based on Bion’s recognition of the potential opportunities created

by such willingness, beginning in 2015, Bion has worked with the USDA’s

Process Verified Program (“PVP”) –

the gold standard in food verification and branding –

to establish a USDA PVP-certified

sustainable brand.

Bion received conditional approval from the PVP related to its Kreider 1 project (utilizing 2G Tech).

our intention to submit an application for the 3G Tech platform when the initial 3G Tech Project is operational later this fiscal year

and seek an approval for certification based on third-party-verified reductions in nutrient impacts, greenhouse gases and pathogens in

the waste stream (and other attributes), based on our 3G Tech.

PVP certification incorporated as part of a recognizable brand will provide

consumers with products and brands that can be trusted.

Bion believes that such a brand and livestock product line will command a pricing

premium for Bion’s livestock JVs and their customers.

Based on Bion’s recognition of the potential opportunities created

by such willingness, beginning in 2015, Bion worked with the USDA’s Process Verified Program (“PVP”) – the ‘gold

standard’ in food verification and branding – to establish a USDA PVP-certified sustainable brand.

Bion received conditional

approval from the PVP related to its Kreider 1 project (utilizing 2G Tech).

It is our intention to submit an application for the Gen3Tech

platform when the initial Gen3Tech Project is operational and seek an approval for certification based on third-party-verified reductions

in nutrient impacts, greenhouse gases and pathogens in the waste stream (and other attributes), based on our Gen3Tech platform.

PVP certification

incorporated as part of a recognizable brand (together with point-of-sale information) will provide consumers with products and brands

that can be trusted.

Bion believes that such a brand and livestock product line will command a pricing premium for Bion’s livestock

JVs and their customers.

Food safety and sustainability are issues

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and worldwide.

Bion’s branding initiative reflects trends already underway in the livestock industry.

Driven by growing consumer demand, large food retailers (such as Walmart and Costco) and restaurant chains (including Chipotle and McDonalds)

are increasingly demanding greater responsibility and improved sustainability in food production practices from their suppliers.

Roundtable for Sustainable Beef (“Roundtable”) was created to advance a sustainable global beef value chain that is “environmentally

sound, socially responsible and economically viable”.

Roundtable for Sustainable Beef (“Roundtable”) was created to advance a sustainable global beef value chain that is “environmentally

sound, socially responsible and economically viable”.

The Roundtable represents members from across the supply chain, including

U.S., Canadian and Australian cattlemen’s associations, Cargill, JBS, Elanco, McDonalds and A&W.

Large institutional investors have begun

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production industry.

The Collier Farm Animal Investment Risk & Return (“FAIRR”) Initiative was recently launched to highlight

the environmental, social, and governance (“ESG”) risks associated with large-scale livestock production.

The Collier Farm Animal Investment Risk & Return (“FAIRR”) Initiative was recently launched to highlight

the environmental, social, and governance (“ESG”) risks associated with large-scale livestock production.

In past years, the UN FAO has issued

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While some of their

early reports were based on incomplete data and faulty methodologies and have since been somewhat quietly ‘retracted’, a wide

array of activist groups, including climate, animal rights, and anti-factory farming advocates, have seized on them to create a global

“anti-meat”

messaging campaign.

“anti-meat” messaging campaign.

Their messaging is predicated on the (incorrect) notion that agriculture, and the livestock

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While this fact

has been publicly ‘debunked’, the anti-meat campaign has been joined and amplified by various other stakeholders, governments,

and more recently, competitors in the alternative protein space, such as plant-based and cellular meats.

Over the last few years, most large

meat and dairy product retailers have announced ‘sustainability’

initiatives, although the definition of sustainability is

meat and dairy product retailers have announced ‘sustainability’ initiatives, although the definition of sustainability is

often unclear.

Based on recent statements from the industry regarding sustainability policy, many that identify goals that are 10 to 30

years in the future, Bion believes that sustainability on the production side will look a lot like what the Company’s 3G Tech

years in the future, Bion believes that sustainability on the production side will look a lot like what the Company’s Gen3Tech

platform can provide today.

The 3G Tech platform can deliver verifiable metrics that demonstrate meaningful improvements in sustainability

The Gen3Tech platform can deliver verifiable metrics that demonstrate meaningful improvements in sustainability

for livestock production that are unmatched in the industry today, including a dramatically reduced carbon and nutrient footprint;

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and traceability and d) humane treatment of both animals and workers.

The more the livestock industry’s

supply chain practices become transparent and known by consumers, the more consumers are seeking alternatives.

Bion’s ‘Sustainable’

branding program is designed to address a wide array of consumer concerns ranging from:

a) ‘where does your food come from?’

Bion’s ‘Sustainable’

branding program is designed to address a wide array of consumer concerns including:

a) ‘where does your food come from?’

(animal heritage information);

b) environmental impacts;

b) climate change (carbon) and other key environmental impacts (air/water/soil);

c) antibiotic use/ standards;

d) animal welfare/ humane treatment;

welfare/ working conditions.

These issues can be addressed with the consumer through general advertising and/or at the point of sale with

a QR code on the packaging that links back to product-specific data.

The verification processes that will be employed by Bion’s

3G Tech platform support block chain traceability, providing accountability throughout that part of the supply chain addressed by Bion’s

platform and enabling any quality issues to be quickly identified by lot and location, minimizing risk to its consumers.

In essence, Bion’s

comprehensive technology platform will enable its livestock JVs and other adopters to be not only the provider of the product the consumer

wants, but also the businesses that shares their consumers’

e) laborer welfare/ working conditions.

These issues can be addressed with the consumer through general

advertising and/or at the point of sale with a QR code on the packaging that links back to product-specific data.

The verification processes

that will be employed by Bion’s Gen3Tech platform support block chain traceability, providing accountability throughout that part

of the supply chain addressed by Bion’s platform and enabling any quality issues to be quickly identified by lot and location, minimizing

risk to its consumers.

In essence, Bion’s comprehensive technology platform will enable its livestock JVs and other adopters to

be not only the provider of the product the consumer wants, but also the businesses that shares their consumers’ values.

Technology Applications/Business Opportunities

For the past decade, Bion has been focused on developing

its 3G Tech platform and creating applications for its patented and proprietary waste management technology platform to pursue JVs and

its Gen3Tech platform and creating applications for its patented and proprietary waste management technology platform to pursue JVs and

other business opportunities in three broad categories:

Development of new state-of-the-art large scale waste treatment facilities (now utilizing our 3G Tech) as JVs, which may be developed

in conjunction with new CAFOs in strategic locations (some of which were previously impracticable due to environmental impacts) and/or

to treat the waste streams from one or more existing large livestock facilities (“Projects”).

Some of these Projects may be

either a) Integrated Projects as described below, b) ‘central processing facilities’

which receive the waste from multiple

livestock facilities, c) Retrofit Projects or d) hybrids with elements of each of these types.

Each version will be able to realize revenue

from multiple revenue streams potentially generated by our 3G Tech.

The “Sustainable Beef”

“Sustainable Organic Beef”

opportunities (discussed both above and below) would be examples of this category.

a) Development

of new state-of-the-art large scale waste treatment facilities (now utilizing our Gen3Tech) as JVs (or through other contractual arrangements

and licensing), which may be developed in conjunction with new CAFOs in strategic locations (some of which were previously impracticable

due to environmental impacts) and/or to treat the waste streams from one or more existing large livestock facilities (“Projects”).

Some of these Projects may be either a) Integrated Projects as described below, b) ‘central processing facilities’ which receive

the waste from multiple livestock facilities, c) Retrofit Projects or d) hybrids with elements of each of these types.

Each version will

be able to realize revenue from multiple revenue streams potentially generated by our Gen3Tech.

The “Sustainable Beef” and

“Sustainable Organic Beef” opportunities (discussed both above and below) would be examples of this category.

Bion anticipates

that some of our Gen3Tech projects will involve swine and poultry.

Some Projects may be international.

b) Installation

of Bion systems to retrofit and environmentally remediate existing large CAFOs (“Retrofits”

and “Retrofit Projects”)

of Bion systems to retrofit and environmentally remediate existing large CAFOs (“Retrofits” and “Retrofit Projects”)

in selected markets where:

a) government policy supports such efforts

(such as the Chesapeake Bay watershed, Great Lakes Basin states, and/or other states and watersheds facing EPA ‘total maximum daily

(“TMDL”) issues), and/or

b) where CAFO’s need our technology

(such as the Chesapeake Bay watershed, Great Lakes Basin states, and/or other states and watersheds facing EPA ‘total maximum daily

load’ (“TMDL”) issues), and/or

b) where CAFO’s need our technology

to obtain permits to expand or develop without negative environmental consequences.

The Kreider Poultry JV project (“Kreider

or Kreider Poultry”) (discussed below) is an example of such a Retrofit Project.

c) Licensing and/or joint venturing of Bion’s technology and applications, primarily targeted outside

North America.

The Kreider Poultry JV project (“Kreider

2” or Kreider Poultry”) (discussed below) is an example of such a Retrofit Project.

c) Licensing and/or joint

venturing of Bion’s technology and applications, primarily targeted outside North America.

In both categories a) and b) above, the Company intends

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above each require substantial political and regulatory (federal, state and local) efforts on the part of the Company and a substantial

part of Bion’s efforts are focused on such political and regulatory matters.

Bion currently intends to pursue the international

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At this time, our primary focus is on categories a)

and b) above, using our 3G Tech to develop new (or expanded) large-scale Projects with strategic partners (including the Kreider 2 Project)

and b) above, using our Gen3Tech to develop new (or expanded) large-scale Projects with strategic partners (including the Kreider 2 Project)

on a joint venture (or other participating contractual form) basis.

Bion’s business model opens up the opportunity for JVs in various

forms, based upon the revenue generated by our 3G Tech platform from nutrient reductions, fertilizer co-products and renewable natural

Bion’s business model opens up the opportunity for JVs in various

forms, based upon the revenue generated by our Gen3Tech platform from nutrient reductions, fertilizer co-products and renewable natural

gas (which revenue streams will be secured through long term take-off agreements for each of these co-products) providing initial support

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We believe that, over time, the

branding opportunity may provide the single largest contribution to the overall economic opportunity enabled by Bion’s 3G Tech platform

and business model.

Initial 3G Tech Project:

Sustainable Beef Demonstration Facility

branding opportunity may provide the single largest contribution to the overall economic opportunity enabled by Bion’s Gen3Tech

platform and business model.

Initial Project:

Gen3Tech Demonstration Facility

During the 2021 fiscal year, Bion completed a series

of core optimization trials of its 3G Tech platform that were required to move forward with its initial commercial scale 3G Tech project.

As described in more detail above, Bion recently executed agreements related to development a sustainable beef demonstration facility

on approximately four (4) leased acres near Fair Oaks, Indiana.

The project, as presently planned, will include a covered barn for up

to 300 head of cattle, designed to allow daily manure production to flow into Bion’s 3G Tech waste treatment/resource recovery platform

that includes an anaerobic digester (“AD”) to generate biogas and CO2, followed by Bion’s patented 3G Tech ammonia recovery

process to produce organic ammonium bicarbonate and nutrient-rich solids.

of core optimization trials of its Gen3Tech platform that were required to move forward with its initial commercial scale Gen3Tech project.

See discussion of the Initial Project above.

Sustainable/Organic Corn-Finished Beef Opportunity

The Dalhart Project discussed above is the first

Bion Gen3Tech project in this category.

is the largest producer of beef (and

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Annual cash receipts for all U.S.

‘cattle and calves’

were lower at approximately $62 billion in 2020, with 2021 receipts anticipated to be higher (and back in line with recent years) at $66

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its several decades of growth, the industry has avoided significant environmental regulation, and instead, has externalized its environmental

costs by returning its waste to crop fields, where much of it is ‘flushed’

costs by returning its waste to crop fields, where much of it is ‘flushed’ downstream.

Today, however, consumer demand is

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Bion disagrees --- but such competition provides and highlights opportunities for us.

The Company doesn’t think the consumer

wants to ‘blow up’

the beef industry, which is responsible for the best and safest beef available in the world today (as well

The Company doesn’t think the consumer

wants to ‘blow up’ the beef industry, which is responsible for the best and safest beef available in the world today (as well

as the livelihoods of almost 800,000 farming, ranching and other families supported by the beef industry in the U.S).

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Bion believes that strong demand exists for a verified sustainable

beef product that is real meat, with the taste and texture of traditional corn-fed beef, but which addresses consumers’

sustainability

Bion’s technology platform is designed to produce such an environmentally sustainable beef (and other meat) product.

beef product that is real meat, with the taste and texture of traditional corn-fed beef, but which addresses consumers’ sustainability

Bion’s technology platform is designed to produce such an environmentally sustainable beef (and other meat) product.

previously achieved conditional approval (for its 2G Tech pending resubmission and final inspections) for USDA brand certification that

would initially include verified reductions in carbon, nutrients, and pathogens.

The Company is confident that its 3G Tech will support

The Company is confident that its Gen3Tech will support

a PVP brand for products of sustainable and organic beef JVs.

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and further, that this is a long term and growing trend.

Bion believes its 30 years of experience and expertise in livestock waste management, coupled with its state-of-the-art 3G Tech platform

Bion believes its 30 years of experience and expertise in livestock waste management, coupled with its state-of-the-art Gen3Tech platform

and first-mover advantage, put the Company and its selected JV partners in a unique position to develop the most environmentally and economically

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that can offer the same level of comprehensive treatment of livestock waste, produce high value coproducts, and deliver a sustainable

brand that can provide an industry response to counter today’s anti-meat messaging, along with the inroads in the animal protein

market being made by alternative protein competitors.

‘Sustainable’

and ‘organic’

‘Sustainable’ and ‘organic’

are two separate and distinct designations and represent different markets and consumers.

While the markets and consumer demographics

may overlap, it is assumed for purposes of Bion’s analysis and planning that the market for sustainable beef will be larger but

command a smaller pricing premium;

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costlier to produce.

Note that in the sustainable and organic markets targeted by Bion, ‘corn-finished’

is a constant.

Note that in the sustainable and organic markets targeted by Bion, ‘corn-finished’ is a constant.

believes, and the market has demonstrated, that delivering the same taste and texture that consumers expect in American beef and other

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chooses sustainability.

Bion’s 3G Tech platform supports production of beef products that check all the boxes:

Bion’s Gen3Tech platform supports production of beef products that check all the boxes:

sustainable, expected

taste/texture, and affordable.

Bion believes there is an opportunity to essentially

‘reinvent’

a portion of the beef production supply chain to provide at least a premium segment of the market with an affordable

product that satisfies consumers’

sustainability concerns.

Further, that the opportunity is large in scope and of sufficient duration

and potential economic upside to warrant the investment of significant capital and resources.

We expect our anticipated project development

timeline us and our JV partners to be first to market with a sustainable/organic beef product at scale.

The ability to deliver a large

supply of a consistent product will be critical to the large retail distribution partners Bion will seek to include in its JVs.

Our first-mover

advantage should allow us to capture a significant portion of the early adopters in what market studies indicate is a potentially large,

and essentially unserved, market.

In parallel with the beef demonstration project

described above, we continue to move forward with preliminary pre-development work on a JV to build a large-scale state-of-the-art beef

cattle feeding operations in the Midwest U.S.

The projects would be developed to produce a supply of corn-fed beef that is a mixture of

both USDA PVP-certified sustainable and sustainable-organic brands.

Bion believes that once it has demonstrated successful commercial

scale operations at its beef demonstration facility and obtained approval of its current OMRI application for AD Nitrogen, it will be

able to move forward with its first large scale sustainable/organic beef JV during the 2022 calendar year.

Bion intends to pursue its ‘beef opportunity’

in a series of large-scale JV projects, which will be based on construction of 10 modules housing approximately 15,000 head each, for

a total of 150,000 head per project.

Bion anticipates that these JVs would be comprised of parties that could include a) Bion, b) capital

market/financing providers, and c) strategic industry partners who would be equity participants.

The supply chain would include participating

a) organic corn producers, b) cow-calf operators, c) cattle feedlot operators, d) slaughter/processing plants, and e) retail distribution

partners subject to standards and controls.

Bion’s model will enable each segment of the supply chain to generate greater profitability

as part of an integrated program, rather than the present fragmented industry model, for essentially performing the same basic services.

One example of such integration is providing an organic corn producer with sufficient ammonium bicarbonate to support a higher yield per

acre, in return for a share of the excess yield value and a production purchase commitment.

Bion plans to begin development of the first

modules of its initial large-scale beef projects in late 2022 based on results from its Initial Project (discussed above).

currently has a goal to develop and establish production at four to six such beef projects in production (at least in part) over the next

five years, with a target capacity goal for this business segment in the range of 600,000 - 900,000 head.

Based on the 14.7 million cows

on feed in the U.S.

in 2020, this would represent market penetration of four to six percent.

Bion recently published a brief white paper

on its beef opportunity (which speaks as of its date), including economic models, which is available for review or download on the Company’s

website at https://bionenviro.com/bions-beef-opportunity/.

Retrofit 3G Tech Project:

Bion believes there is an opportunity, without the

need to ‘reinvent’ the beef production supply chain, to provide at least a premium segment of the market with an affordable

product that satisfies consumers’ sustainability concerns.

Further, we believe that the opportunity is large in scope and of sufficient

duration and potential economic upside to warrant the investment of significant capital and resources.

Our anticipated project development

timeline can potentially allow us and our JV partners to be first to market with a sustainable/organic beef product at scale.

to deliver a large supply of a consistent product will be critical to the large retail distribution partners Bion will seek to include

Our first-mover advantage should allow us to capture a significant portion of the early adopters in what market studies indicate

is a potentially large, and essentially unserved, market.

In parallel with the beef demonstration project described

above, we continue to move forward with preliminary pre-development work on a JV to build a large-scale state-of-the-art beef cattle feeding

operations in the Midwest U.S.

Such projects will be developed to produce a supply of corn-fed beef that is a mixture of both USDA PVP-certified

sustainable and sustainable-organic brands.

The Ribbonwire LOI and Dalhart Project (discussed above), representing the first fruition

of this initiative, will most likely be our first large scale sustainable/organic beef JV with development commencing during the 2023

calendar year.

Bion intends to pursue its ‘beef opportunity’

in a series of large-scale JV projects, which will be based on construction of modules housing approximately 15,000 head each, for differing

aggregate totals depending on multiple geographic and economic factors.

Bion anticipates that these JVs would be comprised of parties

that could include a) Bion, b) capital market/financing providers, and c) strategic industry partners who would be equity participants

and/or offtake customers for the products of the ventures.

The supply chain for each JV would vary and might include participating a)

organic corn producers, b) cow-calf operators, c) cattle feedlot operators, d) slaughter/processing plants, and e) retail distribution

partners--- each subject to negotiated standards and controls.

Bion’s model will potentially enable segment of the supply chain

to generate greater profitability as part of an integrated program, rather than the present fragmented industry model, for essentially

performing the same basic services.

One example of such synergies/integration might involve providing an organic corn producer with sufficient

ammonium bicarbonate fertilizer to support a higher yield per acre, in return for a share of the excess yield value and a production purchase

At present, there is essentially no traceable and

verifiable ‘sustainable beef’ available to the US market except for niche products.

In response to consumer demand for transparency

and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver

these attributes in their products.

While we anticipate a faster adoption of tracking, verifying, and sustainability technologies in other

perishable categories like produce and dairy due to their harvest and production techniques, meat industry leaders have announced their

willingness to move forward with initiatives in this area.

Bion predicts that within five years, consumers will be able to track and verify

claims including sustainability on 25% of the products merchandised in the meat department.

Bion believes that the retail market share

of verifiably sustainable beef in the US will approach 7-10 % in three (3) years (end of 2025) and 25% in five (5) years (end of 2027)

(approximately 2,000,000 cattle annually) (and more thereafter).

If Bion can successfully execute on its sustainable beef business plan,

facilities utilizing Bion’s Gen3Tech platform will provide one-third (1/3) or more of that of the market segment (and a higher portion

of meat that is actually traceable and verifiably sustainable).

Our goal is to have multiple sustainable beef projects under development

(within 3-5 distinct JVs) by the end of 2023.

Our first commercial project is likely to be the Dalhart Project but we anticipate commencing

additional sustainable beef projects during 2023 as well.

Our current target is to have at least three (3) 15,000 head modules (“Modules”)

in development/under construction during 2023 in three (3) different JVs with the initial barns being populated by winter 2024-25.

expansion in the number of distinct JVs is projected through 2025 aiming at 5-10 JVs in process -- each of which JVs will be pursuing

development of multiple Modules -- with targets of 12-15 populated Modules by the end of 2025 (approximately 2%-3% of the US beef market)

and 30-45 Modules constructed and populated by 2027-28 (approximately 6%-8% of the US beef market) with further expansion thereafter.

During this period, Bion’s current goal is that its Gen3Tech platform will be utilized to produce 33% of the “sustainable

beef” category at the end of the period (which will equal approximately 2 million cattle annually)(45 Modules).

There is no assurance that the Company will reach

or approach the goals/targets set forth above.

Reaching such goals/targets will require access to very large amounts of capital (equity

and debt) as each module is projected to cost in excess of $50 million to construct and require mobilization of substantial personnel,

technical resources and management skills.

The Company does not possess either the financial or personnel resources required internally

and will need to source such resources from outside itself.

Retrofit Gen3Tech Project:

Kreider Poultry

JV (“Kreider 2”)

The JV Kreider 2 3G Tech project is intended

to treat the waste from Kreider Farms’

approximately six million egg layer chickens (with capacity for an additional three million

JV (“Kreider 2”)

The JV Kreider 2 Gen3Tech project is intended

to treat the waste from Kreider Farms’ approximately six million egg layer chickens (with capacity for an additional three million

layers)(and potentially 1,600 dairy cows).

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downstream waters.

The Project is planned to be built in multiple phases and may be expanded to include a ‘central processing facility’

with modules that will accept transported waste from the region on a fee basis.

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Kreider has already made a significant investment

in upgrading its poultry facilities to maximize the treatment and recovery efficiencies that can be achieved with Bion’s technology.

Note, however, that the Kreider 2 project is dependent, in part, on development of a substantial competitively-bid market for long-term

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Certain matters related to Kreider 2 are discussed

below at “Kreider Poultry Joint Venture and Pennsylvania and Chesapeake Bay Initiatives”.

at “Kreider Poultry Joint Venture and Pennsylvania and Chesapeake Bay Initiatives”.

Policy Change is Coming

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new market driven strategies to allow the private sector, including the livestock industry, to provide low-cost large-scale verifiable

solutions to our Nation’s clean water challenges.

There are many states that face similar (or worse) to Pennsylvania’s livestock

solutions to our Nation’s clean water challenges.

There are many states that face similar (or worse) to Pennsylvania’s livestock

waste-related pollution issues, and they will be forced to adopt new strategies, as well.

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reductions (and/or other means to monetize environmental benefits) become fully established, Bion anticipates a robust opportunity to

use its 3G Tech-based platforms to retrofit both existing CAFOs and equip new large-scale livestock facilities (“Projects”)

use its Gen3Tech-based platforms to retrofit both existing CAFOs and equip new large-scale livestock facilities (“Projects”)

which will generate the supplemental revenue needed to profitably afford technology implementation from sales of verified nutrient reduction

Bion's 3G Tech can provide a solution to a significant

Bion's Gen3Tech can provide a solution to a significant

portion to the livestock problem discussed above because it prevents the uncontrolled release to the environment of most of the nutrients

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Similar to point-source treatment, such as provided by an industrial or municipal wastewater

treatment plants, the performance of Bion’s technology platform can be precisely monitored, measured and quantified (in contrast

to the modeled, in-exact - and so far, disappointing - results from modeled BMPs).

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utilized in the U.S.

is clearly failing, because it doesn’t adequately address waste from agriculture.

About half of U.S.

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However, approximately 75 percent of the nitrogen in that manure is not utilized by the

plants being fertilized but rather ‘escapes’

to contaminate the environment through various pathways.

plants being fertilized but rather ‘escapes’ to contaminate the environment through various pathways.

Because livestock waste

is one of the largest contributors to nutrient problems in our watersheds, livestock waste treatment can be the source of the low-cost

solution for such problems –

if the waste is treated upstream at (or close to) the source of production.

solution for such problems – if the waste is treated upstream at (or close to) the source of production.

Manure control technologies,

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and water quality solutions compared to current strategy.

If Bion’s technology is implemented in appropriate situations, it will

provide the livestock industry with the recurring revenues that are needed to offset the costs of technology adoption without major disruption

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but this common-sense approach is being accepted by a widening group of stakeholders.

NOTE, THAT THE CURRENT COVID-19 PANDEMIC AND RESULTANT

NOTE, THAT THE COVID-19 PANDEMIC AND RESULTANT

ECONOMIC CRISES AND BUDGETARY CONSTRAINTS APPEAR TO HAVE DELAYED POLICY INITIATIVES RELATED TO THESE MATTERS AT BOTH THE STATE AND FEDERAL

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at the federal level in the projected infrastructure spending to create funding for climate and environmental initiatives.

the Phase II Infrastructure proposals under discussion and scheduled to be taken up in the current legislative session include a 30% federal

tax credit to partially offset costs of adoption of environmental technologies such as AD and Bion’s 3G Tech waste treatment technology.

Such an incentive, if passed (of which there is no assurance), would materially impact JV project economics (including the Kreider 2 project).

the recently passed Inflation Reduction Act includes provisions that may provide up to a 30% federal tax credit to partially offset costs

of adoption of environmental technologies such as AD and Bion’s Gen3Tech waste treatment technology.

Such an incentive, if available

(of which there is no assurance), would materially impact JV project economics (including the Dalhart Project and the Kreider 2 project).

Note that a bipartisan 2013 Pennsylvania legislative study projected

that creating a competitive bidding program to procure verified nitrogen reductions to meet federal Chesapeake Bay mandates, regardless

of source , could reduce the state’s tax- and ratepayer-funded compliance costs by up to 80 percent (approximately $1.5B annually).

of source , could reduce the state’s tax- and ratepayer-funded compliance costs by up to 80 percent (approximately $1.5B

The legislative study was updated in 2018 to reflect new policies.

The updated report projects savings of up to 90 percent.

in the original study, much of the savings were due to low-cost high-impact manure control projects (Bion’s technology figured prominently

in the report).

Senate Bill 575, which was supported by legislative leadership, national livestock interests and other key stakeholders

(and is consistent with US EPA policies), which would have established a competitive procurement program and unlock some of these opportunities

in PA was passed during June 2019 by the Pennsylvania Senate voted 33 to 17 but one effect of the Covid-19 pandemic crisis has been that

PA funding for new initiatives is largely ‘on hold’

at the present time.

Currently SB 475 and SB 832 which deal with these

matters have been introduced and are pending.

Bion anticipates that after passage of a similar bill in the future (of which there is no

assurance) , PA will establish a competitively-bid market for nutrient credits within twelve months after legislative passage and being

signed into law by the Governor.

See “Pre-3G Tech:

As discussed in the original study, much of the savings were due to low-cost high-impact manure control projects (Bion’s technology

figured prominently in the report).

Senate Bill 575, which was supported by legislative leadership, national livestock interests

and other key stakeholders (and is consistent with US EPA policies), which would have established a competitive procurement program and

unlock some of these opportunities in PA was passed during June 2019 by the Pennsylvania Senate voted 33 to 17 but one effect of the

Covid-19 pandemic crisis has been that PA funding for new initiatives is largely ‘on hold’ at the present time.

Bion anticipates

that after passage of a similar bill in the future (of which there is no assurance), PA will establish a competitively-bid market for

nutrient credits within twelve months after legislative passage and being signed into law by the Governor.

See “ Pre-Gen3Tech:

Chesapeake Bay Watershed:

Kreider Farms Projects/Pennsylvania Initiatives”

below for discussion of the history and status of matters in PA.

In a 2017 Letter of Expectation to PA’s

Kreider Farms Projects/Pennsylvania Initiatives ” below for discussion of the history and status of

matters in PA.

In a 2017 Letter of Expectation to PA’s

Department of Environmental Protection, US EPA demonstrated its support of a procurement strategy to engage the private sector - as long

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It is noteworthy that US EPA and national livestock industry representatives agree on this strategy.

a procurement strategy is also consistent with USDA and EPA support of ‘Private Partnerships’

and OMB’s guidance that

a procurement strategy is also consistent with USDA and EPA support of ‘Private Partnerships’ and OMB’s guidance that

supports acquiring verified results vs.

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Today, most states face a similar issue---unfunded federal clean water mandates.

Pennsylvania’s

proposed competitive bidding program provides an opportunity to significantly reduce the cost to PA (and a model for other states to utilize

in the future) in meeting such mandates.

Integrated Projects:

While Bion’s 3G livestock waste treatment technology

reduces the environmental impacts from livestock waste, Bion’s comprehensive technology platform provides the broader integrated

response to consumer environmental sustainability concerns.

The adoption of Bion’s platform integrates to varying degrees of the

overall livestock production cycle from crop production to processing.

Projects utilizing the Bion 3G Tech platform will be able to create

cost-effective, verified data-based responses to consumer sustainability and food safety concerns.

Without such integration, adoption

of livestock waste treatment technology in a vacuum will not address the various growing consumer concerns (such as animal health and

worker safety issues) related to livestock agriculture.

We believe that Bion’s technology also creates

the opportunity to enter joint ventures with livestock and other agriculture industry entities (“JVs”) to develop Integrated

Projects that profitably integrate large-scale CAFO's production with their feed producers (some of whom may utilize Bion’s organic

fertilizers), downstream food processing facilities, and in certain applications, biofuel/ethanol production.

The Bion 3G technology platform

will provide treatment of, as well as renewable energy and co-product recovery/production from, the CAFO and/or food processing waste

streams, on-site utilization of some or all of the renewable energy generated (and potentially, biofuel/ethanol production), in an environmentally

and economically sustainable manner that reduces the aggregate capital expense and operating costs for the entire integrated complex while

increasing production efficiencies and generating supplemental revenue streams.

We anticipate that most JV Projects (including Integrated

Projects) undertaken by the Company in which we retain ownership interests will be pursued through and owned by single project subsidiaries.

Bion PA 1 LLC (“PA1”), through which the Kreider 1 System was developed at the Kreider dairy, Bion PA 2 LLC (“PA2”)

through which we are pursuing development of the Kreider JV and the Kreider 2 poultry waste Project, and Bion 3G-1 LLC (“3G1”)

through which our initial 3G Tech beef project will be developed, are the first three of what are likely to be many such entities.

Going Concern:

The Company's consolidated financial statements for

the years ended June 30, 2021 and 2020 included herein have been prepared assuming the Company will continue as a going concern.

The Company has not recorded significant revenue from operations for either of the years ended June 30, 2021 or June 30, 2020.

Company has incurred net losses of approximately of $3,451,000 and $4,553,000 during the years ended June 30, 2021 and 2020, respectively.

The Company had a working capital deficit and stockholders' deficit, respectively, of approximately $6,614,000 and $11,445,000 as of June

30, 2021.The report of the independent registered public accounting firm on the Company's consolidated financial statements as of and

for the years ended June 30, 2021 and June 30, 2020 includes a "going concern"

explanatory paragraph, which means that there

are factors that raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s audited

financial statements for the years ended June 30, 2022 and 2021 were prepared assuming the Company will continue as a going concern.

The Company has net income of $8,292,000 for the year ended June 30, 2022.

The Company has incurred net losses of approximately

$3,451,000 for the year ended June 30, 2021.

The Report of the Independent Registered Public Accounting Firm on the Company’s consolidated

financial statements as of and for the year ended June 30, 2022 includes a “going concern” explanatory paragraph which means

that there are factors that raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has

incurred net losses from operations of approximately $2,550,000 and $2,828,000 for the years ended June 30, 2022 and 2021, respectively.

At June 30, 2022, the Company has working capital and a stockholders’ deficit of approximately $1,364,000 and $932,000, respectively.

Management’s plans with respect to these matters are described in this section and in our consolidated financial statements (and

notes thereto), and this material does not include any adjustments that might result from the outcome of this uncertainty.

However, there

is no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near future.

PRINCIPAL PRODUCTS AND SERVICES

The Company’s primary focus is on implementing

its 3G Tech in JVs (as described above).

Therefore, the category ‘

PRINCIPAL PRODUCTS AND SERVICES’

appropriate for the Company’s business.

While the Company may implement some 3G Tech systems on a contractual basis, our business

does not primarily involve sale of our systems or long term direct operations/management of our systems.

The discussion below should be

read in the context this business focus (described in detail above and below).

The Company’s primary focus is on implementing

its Gen3Tech in JVs (as described above).

Therefore, the category ‘PRINCIPAL PRODUCTS AND SERVICES’ is not fully appropriate

for the Company’s business.

While the Company may implement some Gen3Tech systems on a contractual basis, our business does not

primarily involve sale of our systems or long term direct operations/management of our systems.

The discussion below should be read in

the context this business focus (described in detail above and below).

Bion has invested over $100 million in its business

since 1989, much of which has been expended development of its technologies and technology platform, policy change initiatives and other

Our 2G Tech (now supplanted by our 3G Tech) was proven at commercial scale and was been reviewed and qualified for federal

loan guarantees under USDA’s Technical Assessment program.

The 2G Tech platform (as will our 3G Tech going forward) provided verified

Our 2G Tech (now supplanted by our Gen3Tech) was proven at commercial scale and has been reviewed and qualified for federal

loan guarantees under USDA’s Technical Assessment program.

The 2G Tech platform (as will our Gen3Tech going forward) provided verified

nutrient credits from wet livestock waste (dairy, beef, and swine) that can be used to offset US EPA-mandated TMDL requirements.

intends to implement its first 3G Tech systems during the current 2022 fiscal year.

Our 3G Tech and 3G Tech platform provide the basis

for our planned JVs and Projects and therefore constitute our ‘principal products’.

intends to implement its first Gen3Tech systems during the current fiscal year.

Our Gen3Tech and Gen3Tech platform provide the basis

for our planned JVs and Projects and therefore constitute our ‘principal products’.

Each Bion system (whether prior 2G Tech or current

3G Tech) is comprised of several process units combined in a ‘process train’, much like a municipal wastewater treatment plant.

The platform utilizes a combination of mechanical, biological, and thermal processes and can be configured in a variety of ways, based

on the needs and economics of the location, to provide the level of environmental treatment required, while separating and aggregating

Gen3Tech) is comprised of several process units combined in a ‘process train’, much like a municipal wastewater treatment

The platform utilizes a combination of mechanical, biological, and thermal processes and can be configured in a variety of ways,

based on the needs and economics of the location, to provide the level of environmental treatment required, while separating and aggregating

the various components of the waste stream for processing and recovery.

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purposes, the same data can also be used to support the claims of a USDA-certified sustainable branding.

Bion’s waste treatment solutions are scalable,

proven in commercial operations (2G Tech) and the verified results have been accepted by EPA (for use as a “qualified offset”),

Bion’s waste treatment solutions are scalable,

proven in commercial operations (2G Tech) and the verified results have been accepted by EPA (for use as a “qualified offset”),

USDA and other regulatory agencies.

Bion’s core processes are protected by nine U.S.

patents and six international patents, with

additional applications pending in the US, EU, New Zealand, Mexico, Brazil, Argentina and Australia.

We do not know of any other cost-effective

technology that provides Bion system’s level of treatment of livestock waste:

dairy, beef, poultry and swine.

Note that while revenues

from Bion’s 2G platform were 90 percent dependent on developing markets for nutrient reductions, our 3G Tech systems will generate

revenues from multiple co-product streams to supplement revenues from nutrient reductions.

Bion’s 3G Tech platform has been developed over

the past six years to maximize co-product recovery values from large scale facilities (or multiple modular facilities) while maintaining/improving

Bion’s core processes are protected by five United States patents.

Additionally, Bion has two

United States patent applications pending and has three international patent applications currently pending.

We do not know of any other

cost-effective technology that provides Bion Gen3Tech platform’s system’s level of treatment of livestock waste (dairy, beef,

poultry and swine) or which can provide the full set of ‘sustainability benefits’ anticipated to be provided by the Company’s

Note that while revenues from Bion’s 2G platform were 90 percent dependent on developing markets for nutrient reductions, our

Gen3Tech platform will generate revenues from multiple co-product streams to supplement revenues from nutrient reductions .

Bion’s Gen3Tech platform has been developed

over the past six years to maximize co-product recovery values from large scale facilities (or multiple modular facilities) while maintaining/improving

the level of environmental remediation produced by our 2G systems.

The 3G systems will recover nitrogen from the CAFO waste stream for

production of nitrogen-rich fertilizer products that Bion believes will qualify for certification for use in growing organic crops (the

first approval was received during the 2020 fiscal year) for livestock and human.

Further, the 3G Tech platform will recover methane that

can be conditioned to pipeline quality and will qualify for various credits and subsidies as clean, renewable natural gas.

two revenue streams will supplement revenues from nutrient reduction credits and USDA PVP -certified sustainable branding.

production of nitrogen-rich products that Bion believes will qualify for certification for use as fertilizer in growing organic crops

(the first approval was received during the 2020 fiscal year) for livestock and human consumption and/or for other uses.

Gen3Tech platform will recover methane that can be conditioned/cleaned to pipeline quality gas (with the CO2 recovered from the cleaning

process re-cycled and utilized in the fertilizer production process) and will qualify for various credits and subsidies as clean, renewable

These two revenue streams will supplement revenues from the sale of USDA PVP-certified, verifiably sustainable branded

meat products.

In some locations, revenues may also be realized from nutrient credits and other environmental services.

Building upon our 2G Tech and Bion's over 20 years

of experience providing waste treatment services to the livestock industry, commencing with our first generation technology applications,

the Company is pursuing the Retrofit opportunity related to environmental remediation of existing CAFOs.

Our technology has evolved

and been upgraded over the decades to meet changing standards and requirements.

Bion's 3G Tech platform creates potentially profitable

business opportunities to provide waste treatment services and systems and/or renewable energy production capability to existing large

livestock operations (of which there are many), and potentially to smaller facilities through aggregation of waste streams.

However, this

is not our primary focus.

Candidates for these solutions include individual CAFO facilities that face impending regulatory action,

CAFOs that wish to expand or relocate, and operations located in regions that suffer severe and immediate environmental issues, such as

the Chesapeake Bay watershed, Great Lakes region and/or the San Joaquin Valley, where financial incentives (such as nutrient reduction

credit trading programs) are (or may become) available that encourage voluntary reductions of nutrient releases and/or atmospheric emissions

from agricultural sources.

the Company is also pursuing the Retrofit opportunities related to environmental remediation of existing CAFOs in appropriate situations

(see discussion of Kreider Poultry venture herein).

Our technology has evolved and been upgraded over the decades to meet changing

standards and requirements.

Bion's Gen3Tech platform creates potentially profitable business opportunities to provide waste treatment

services and systems and/or renewable energy production capability to existing large livestock operations (of which there are many),

and potentially to smaller facilities through aggregation of waste streams.

However, this is not our primary focus.

Candidates for these

solutions include individual CAFO facilities that face impending regulatory action, CAFOs that wish to expand or relocate, and operations

located in regions that suffer severe and immediate environmental issues, such as the Chesapeake Bay watershed, Great Lakes region and/or

the San Joaquin Valley, where financial incentives (such as nutrient reduction credit trading programs) are (or may become) available

that encourage voluntary reductions of nutrient releases and/or atmospheric emissions from agricultural sources.

Sustainable/Organic Corn-Fed Beef Opportunity

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at some length above.

It is the Company’s current intention to initiate several JVs pursuing this opportunity as developer of, technology

provider to, and direct participant.

It is the Company’s current intention to initiate several JVs pursuing this opportunity as developer of,

technology provider to, and direct participant.

See discussion above.

It is not possible at this time to firmly predict

where the initial JVs and/or Project will be developed or the order in which JVs and Projects will be developed.

While it is not possible at this time to firmly predict

where the initial JVs and/or Project will be developed or the order in which JVs and Projects will be developed, the Dalhart Project

(see discussion above) will most likely be the Company’s first large scale Gen3Tech commercial project.

All potential JVs and/or

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Projects not yet under active consideration.

The Company's successful accomplishment of its

business activities is dependent upon many factors (see 'Forward-Looking Statements' above) including without limitation the following,

none of which can be assured at this date:

Successful development and completion of the first 3G Tech Project(s) to demonstrate the

commercial economics of its 3G Tech platform;

Successful development of the first Integrated Project to demonstrate the operation of a

fully-integrated, environmentally-compliant Integrated Project at a profitable level;

Establishment of a substantial and liquid market for nutrient reductions and other environmental

attributes generated from the Company’s future facilities;

Establishment of marketing relationships needed for realization of full value from the saleable

co-products including sustainable and organic meat products and organic nitrogen fertilizer products;

The Company's successful accomplishment of its business

activities is dependent upon many factors (see 'Forward-Looking Statements' above) including without limitation the following, none of

which can be assured at this date:

Successful development and completion of the Initial Project (at least phase 1) and the first large scale Gen3Tech commercial Project(s) to demonstrate the commercial economics of its Gen3Tech platform;

Successful development of the first Integrated Project to demonstrate the operation of a fully-integrated, environmentally-compliant Integrated Project at a profitable level;

Establishment of a substantial and liquid market for nutrient reductions and other environmental attributes generated from the Company’s future facilities;

Establishment of marketing relationships needed for realization of full value from the saleable co-products including sustainable and organic meat products and organic nitrogen fertilizer products;

Successful completion of organic certifications and USDA PVP-certified sustainable brand;

Our ability to raise sufficient funds to allow us to finance our activities, JV’s,

and Projects;

ability to raise sufficient funds to allow us to finance our activities, JVs, and Projects;

Regulatory and enforcement policies at the Federal, State and local levels.

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and Chesapeake Bay Initiatives

The Kreider 1 2G Tech dairy system in Pennsylvania

in the Chesapeake Bay watershed represented the Company's first Retrofit in this market segment.

This Retrofit installation was designed

and intended primarily to reduce nitrogen and phosphorus releases and ammonia emissions from the dairy waste streams to generate tradable

nutrient reduction credits as part of a nutrient credit trading program through the PA Department of Environmental Protection (‘PADEP’).

While this project has not been (and most likely will not be) a commercial success on a stand-alone basis (due to PA’s failure to

implement a viable long-term credit trading market), it has demonstrated that Bion’s manure treatment technology can generate low-cost

verified credits, providing the basis of a 2013 PA Legislative Budget and Finance Committee report (updated in 2018) that supports the

use of manure technologies to provide low-cost alternatives to meet Bay mandates.

Bion’s activities in Pennsylvania

(“PA”) commenced with the Kreider 1 2G Tech dairy system in the Chesapeake Bay watershed.

This retrofit installation was

designed and intended primarily to reduce nitrogen and phosphorus releases and ammonia emissions from the dairy waste streams to

generate tradable nutrient reduction credits as part of a nutrient credit trading program through the PA Department of Environmental

Protection (‘PADEP’).

While this project was not a commercial success (due to PA’s failure to implement a viable

long-term credit trading market), it demonstrated that Bion’s manure treatment technology can generate low-cost verified

credits and provided the basis of a 2013 PA Legislative Budget and Finance Committee report (updated in 2018) that supports the use

of manure technologies to provide low-cost alternatives to meet Bay mandates.

It is possible that the Kreider 2 poultry waste treatment

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for nutrient reduction credits develops in PA, of which there is no assurance.

The Kreider 2 Project will utilize our 3G Tech platform

to treat the waste stream from Kreider Farm’s large poultry operations (possibly together with waste from other nearby poultry operations

and/or other waste streams) (and the dairy waste stream previously treated in the Kreider 1 system) to generate renewable energy, marketable

nutrient reduction credits and co-products (including nitrogen in organic and/or non-organic forms).

It is targeted to treat the waste

stream from approximately 9 million birds, in modules, when fully developed.

Estimated capital costs (‘capex’) are currently

in the $60 million range (with the caveat that no site has yet been chosen, technology development is not complete and the final design

work has not yet begun) and has the potential to generate gross revenues of up to $50 million annually from the multiple revenue streams

based on current projected yields and prices, none of which are assured.

Note that tech and system design work is continuing and the Company

anticipates reduce reductions of both capex and operating costs.

To complete and operate the Kreider 2 project,

substantial capital (equity and/or debt) has been and will continue to be expended.

Additional funds will potentially be needed

to be expended so that the Kreider 1 system and the Pennvest Loan (see below) situation can be resolved, of which there is no assurance.

The Kreider 1 system was developed to earn revenue primarily from the sale of nutrient reduction (and/or other) environmental credits.

contrast, upon successful construction and operation, the Company anticipates that the Kreider 2 Project will earn revenue from the

sale of nutrient reduction (and/or other) environmental credits generated by its 3G Tech system and through sales of renewable energy

and co-products (fertilizer nutrients and soil amendment products in organic and/or non-organic forms and/or renewable energy and environmental

credits) recovered and sustainably branded products as discussed above.

See “ Retrofit Gen3Tech Project:

Kreider Poultry

JV (“Kreider 2”) ” above.

The Kreider 2 Project will utilize our Gen3Tech platform to treat the waste stream from

Kreider Farm’s large poultry operations (possibly together with waste from other nearby poultry operations and/or other waste streams)

(and the dairy waste stream previously treated in the Kreider 1 system) to generate renewable energy, marketable nutrient reduction credits

and co-products (including nitrogen in organic and/or non-organic forms).

It is targeted to treat the waste stream from approximately

9 million birds, in modules, when fully developed.

Estimated capital costs (‘capex’) are currently estimated in the $60 million

range (with the caveat that no site has yet been chosen, technology development is not complete and the final design work has not yet

begun) and has the potential to generate gross revenues of up to $50 million annually from the multiple revenue streams based on current

projected yields and prices, none of which are assured.

Note that tech and system design work is continuing and the Company anticipates

reduce reductions of both capex and operating costs.

To date the market for long-term nutrient reduction

Credits in Pennsylvania has been very slow to develop and the Company’s activities have been negatively affected by such lack of

However, Bion is confident that if and when these markets are established, the Credits it produces will be competitive

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Pursuant to the PA legislative study, by replacing sector allocation (for all sectors) with competitive bidding, up to 80

percent savings could be achieved in PA’s Chesapeake Bay compliance costs ($1.5 billion annually) by 2025.

If the legislative study

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cost estimates of $376 million).

US EPA is now focused on PA’s storm water allocation (3.5 million pounds) and has this sector on

‘backstop level actions’, the highest level of EPA-oversight and the final step before sanctions.

US EPA is now focused on PA’s storm water allocation (3.5 million pounds) and has this sector on

‘backstop level actions’, the highest level of EPA-oversight and the final step before sanctions.

In the same 2004 PA DEP

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for storm water cost was $5.6 billion.

In April 2017, US EPA sent a Letter of Expectation to PA DEP, expressing the agency’s support

for the use of nutrient credit trading and competitive bidding to engage the private-sector to lower costs.

The letter specifically encouraged

the use of credit trading to offset the state’s looming storm water obligations.

Bion anticipates that it will be able to profitably

sell nutrient credits generated at the Kreider 2 facilities (and subsequent projects) if prices are in the range of $6-$12 (or higher)

develop the Kreider 2 project if it is able sell nutrient credits generated at the Kreider 2 facilities (and subsequent projects) at prices

are in the range of $6-$12 (or higher) per lb.

of nitrogen reduction under long-term contracts, of which there is no assurance.

Bion further believes that with the studies

and information now available to other states that are (or will shortly be) facing these same decisions, a cost-benefit analysis will

make it clear from the outset that competitive bidding for nutrient reduction credits from alternative approaches can provide dramatically

lower-cost solutions than traditional strategies.

Bion further believes that with the studies and information now available to other states that are (or will shortly be) facing these same

decisions, a cost-benefit analysis will make it clear from the outset that competitive bidding for nutrient reduction credits from alternative

approaches can provide dramatically lower-cost solutions than traditional strategies.

The Kreider 2 poultry waste treatment facility in

PA may be one of its initial 3G Tech Projects.

PA may be one of our initial Gen3Tech Projects.

Bion intends that it will select a site for the Kreider 2 Project and/or its initial Integrated

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Our principal executive offices are now located at the residence of our Office Manager at 9 East Park Court, Old Bethpage,

New York 11804, at which location most of the Company’s physical records and central computer reside.

Our primary telephone number

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HISTORY AND DEVELOPMENT OF OUR BUSINESS

Substantially all of our business and operations to

date has been conducted through wholly-owned subsidiaries, Bion Technologies, Inc.

Substantially all of our business and operations

to date has been conducted through wholly-owned subsidiaries, Bion Technologies, Inc.

(a Colorado corporation organized September 20,

1989), Bion Integrated Projects Group, Inc.

("Projects Group") (formerly Bion Dairy Corporation through August 2008 and originally

Bion Municipal, Inc., a Colorado corporation organized July 23, 1999) and Bion Services Group, Inc.

("Services Group") (formerly

Bion International, Inc., a Colorado corporation organized July 23, 1999) and BionSoil, Inc.

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organized June 3, 1996).

Bion is also the parent of Bion PA 1 LLC (a Colorado entity organized August 14, 2008) (“PA1”),

Bion PA 2 LLC (a Colorado entity organized June 24, 2010) (“PA2”) and Bion 3G-1, LLC (a Colorado entity organized on September

In January 2002, Bion entered into a series of transactions whereby the Company became a 57.7% (now 58.9%) owner of Centerpoint

Corporation (a Delaware corporation organized August 9, 1995) ("Centerpoint").

Bion is also the parent of Bion PA 2 LLC (a Colorado entity organized June 24, 2010) (“PA2”)

and Bion 3G-1, LLC (a Colorado entity organized on September 23, 2021).

In January 2002, Bion entered into a series of transactions whereby

the Company became a 57.7% (now 58.9%) owner of Centerpoint Corporation (a Delaware corporation organized August 9, 1995) ("Centerpoint").

Bion was formerly the parent of Bion PA 1 LLC (a Colorado entity organized August 14, 2008) (“PA1”) which was dissolved on

December 29, 2021 (See “ Pennvest Loan and Bion PA1 LLC Dissolution ” herein).

Although we have been conducting business since 1989,

we determined that we needed to redefine how we could best utilize our technology during 2003.

From 2003 through early 2008, we

primarily worked on technology improvements and applications and in furtherance of our business model of Integrated Project development.

During 2008 we re-commenced pursuing active commercial transactions involving installation of our 2G Tech for CAFO waste treatment and

related environmental remediation and initiation of pre-development modeling and pre-development work to prepare for our initial Integrated

We are now focused primarily on development of JVs based on implementation of our 3G Tech platform (and business model) in the

industry segments discussed above.

we determined that we needed to redefine how we could best utilize our technology during 2003 and again in 2015.

From 2003 through

early 2008, we primarily worked on technology improvements and applications and in furtherance of our business model of Integrated Project

During 2008 we re-commenced pursuing active commercial transactions involving installation of our 2G Tech for CAFO

waste treatment and related environmental remediation and initiation of pre-development modeling and pre-development work to prepare for

our initial Integrated Projects.

Commencing during 2015, the Company focused its efforts largely on the development of our Gen3Tech platform

which was largely completed during 2021.

We are now focused primarily on development of JVs and Projects based on implementation of our

Gen3Tech platform (and business model) in the industry segments discussed above.

Our original systems were wastewater treatment systems

for dairy farms and food processing plants.

The basic design was modified in late 1994 to create Nutrient Management Systems ("NMS")

that produced organic soil products as a byproduct of remediation of the waste stream when installed on large dairy or swine farms.

Through June 30, 2002, we sold and subsequently installed, in the aggregate, approximately 30 of these first iteration of Bion’s systems

in 7 states, of which we believe a few may still in operation in 3 states.

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The initial versions of our second

generation of Bion Systems were designed to harvest solids used to produce organic fertilizer and soil amendments or additives (the "BionSoil(R)

products") in a few weeks as compared to six to twelve months with our first-generation systems.

generation of Bion Systems were designed to harvest solids used to produce organic fertilizer and soil amendments or additives (the "BionSoil(R)

products") in a few weeks as compared to six to twelve months with our first-generation systems.

During 2003-4 we designed, installed and began testing

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In December 2004, Bion published an independently peer-reviewed report, a copy of which

may be found on our website, www.biontech.com , with data from the DeVries project demonstrating

a reduction in nutrients (nitrogen and phosphorus) of approximately 75% and air emissions of approximately 95%.

More specifically,

those published results indicated that the Bion System produced a 74% reduction of nitrogen and a 79% reduction of phosphorus.

air results show that the Bion System limited emissions from the waste stream as follows:

may be found on our website, www.biontech.com , with data from the DeVries project demonstrating a reduction in nutrients (nitrogen

and phosphorus) of approximately 75% and air emissions of approximately 95%.

More specifically, those published results indicated

that the Bion System produced a 74% reduction of nitrogen and a 79% reduction of phosphorus.

The air results show that the Bion

System limited emissions from the waste stream as follows:

(in pounds per 1,400-pound dairy cow per year):

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support of large-scale sustainable Projects.

From 2009 through 2015 (when development of our 3G

Tech platform began), Bion actively pursued business opportunities in three broad areas 1) Bion systems to retrofit of existing

CAFO’s (some of which may generate verified nutrient credits and revenues from the production of renewable energy and byproducts)

(“Retrofits”), and 2) development of new state-of-the-art large scale waste treatment facilities, potentially in conjunction

with new CAFOs developed in strategic locations that were not previously possible due to environmental constraints in strategic locations

(“Projects”) (some of these may be “closed loop’

Integrated Projects that were not previously possible due to

environmental constraints as described below), and 3) licensing and/or joint venturing of Bion’s technology (primarily) outside

North America.

Bion is now primarily pursuing JVs related to these opportunities within the United States and internationally based on

our 3G Tech as described above.

From 2009 through 2015 (when development of our Gen3Tech

platform began), Bion actively pursued business opportunities in three broad areas 1) Bion systems to retrofit of existing CAFO’s

(some of which may generate verified nutrient credits and revenues from the production of renewable energy and byproducts) (“Retrofits”),

and 2) development of new state-of-the-art large scale waste treatment facilities, potentially in conjunction with new CAFOs developed

in strategic locations that were not previously possible due to environmental constraints in strategic locations (“Projects”)

(some of these may be “closed loop’ Integrated Projects that were not previously possible due to environmental constraints

as described below), and 3) licensing and/or joint venturing of Bion’s technology (primarily) outside North America.

primarily pursuing JVs related to these opportunities within the United States and internationally based on our Gen3Tech as described

Pre-Gen3Tech:

Chesapeake Bay Watershed:

Farms Projects/Pennsylvania Initiatives

Loan and Bion PA1 LLC (“PA1”) Dissolution/Kreider Farms Projects/Pennsylvania Initiatives

Pennvest Loan and Bion PA1 LLC (“PA1”)

PA1, the Company’s

wholly-owned subsidiary, was dissolved on December 29, 2021 on which date it owed approximately $10,010,000 under the terms of the Pennvest

Loan related to the construction of the Kreider 1 System including accrued interest and late charges totaling $2,255,802 as of that date.

Through the date of the dissolution, PA1 was a wholly-owned subsidiary of the Company and its assets and liabilities were included on

the Company’s consolidated balance sheets.

At September 30, 2021, PA1’s total assets were $297 and its total liabilities were

$10,154,334 (including the Pennvest Loan in the aggregate amount of $9,939,148, accounts payable of $214,235 and accrued liabilities of

$950) which sums were included in the Company’s consolidated balance sheets in its Form 10-Q for the quarter ended September 30,

Subsequent to the dissolution of PA1, its assets and liabilities are no longer consolidated and included in the Company’s

consolidated balance sheets .

As of December 29, 2021,

PA1’s total assets were nil and its total liabilities were $10,234,501 (including the Pennvest Loan in the aggregate amount of $10,009,802,

accounts payable of $212,263 and accrued liabilities of $12,436.

The net amount of $10,234,501 was recognized as a gain on the legal dissolution

of a subsidiary in other (income) expense.

As background, the terms

of the Pennvest Loan provided for funding of up to $7,754,000 which was to be repaid by interest-only payments for three years, followed

by an additional ten-year amortization of principal.

The Pennvest Loan accrued interest at 2.547% per annum for years 1 through 5 and

3.184% per annum for years 6 through maturity.

The Pennvest Loan required minimum annual principal payments of approximately $5,886,000

in fiscal years 2013 through 2021, and $846,000 in fiscal year 2022, $873,000 in fiscal year 2023 and $149,000 in fiscal year 2024.

Pennvest Loan was collateralized by PA1’s Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but

not limited to, revenues generated from nutrient reduction credit sales and by-product sales.

In addition, in consideration for the excess

credit risk associated with the project, Pennvest was entitled to participate in the profits from Kreider 1 calculated on a net cash flow

basis, as defined.

The Company has incurred interest expense related to the Pennvest Loan of $123,444 and $246,887 for the years ended

June 30, 2022 and 2021, respectively.

Based on the limited development of the depth and breadth of the Pennsylvania nutrient reduction

credit market, PA1 commenced discussions and negotiations with Pennvest related to forbearance and/or re-structuring the obligations under

the Pennvest Loan during 2013.

In the context of such negotiations, PA1 elected not to make interest payments to Pennvest on the Pennvest

Loan since January 2013.

Additionally, the PA1 did not make any principal payments, which were to begin in fiscal 2013, and, therefore,

the Company classified the Pennvest Loan as a current liability through the dissolution of PA1 on December 29, 2021.

During August 2012, the Company

provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards

which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan has been solely an obligation of PA1 since

Note, however, the Company’s consolidated balance sheet as of June 30, 2021 reflects the Pennvest Loan as a liability

of $9,868,495 despite the fact that the obligation (if any) was solely an obligation of PA1 .

During August 2012, the Company provided Pennvest

(and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards which were incorporated

in the Pennvest financing documents and, as a result, the Pennvest Loan has been solely an obligation of PA1 since that date.

Note, however,

the Company’s consolidated balance sheets as of June 30, 2021 reflects the Pennvest Loan as a liability of $9,868,495 despite the

fact that the obligation (if any) was solely an obligation of PA1 .

On September 25, 2014, the Pennsylvania Infrastructure

Investment Authority (“Pennvest”) exercised its right to declare the PA1’s Pennvest Loan in default, accelerated the

Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014.

make the payment and did/does not have the resources to make the payments demanded by Pennvest.

PA1 commenced discussions and negotiations

with Pennvest concerning this matter but Pennvest rejected PA1’s proposal made during the fall of 2014.

PA1 made a final proposal

to Pennvest during September 2021 which proposal was also rejected by Pennvest.

PA1 provided Pennvest with its financial statements (which

include a description of system status) annually.

During the 2021 fiscal year, Pennvest’s auditors requested a ‘corrective

action plan’ and PA1 informed Pennvest that “… there is no viable corrective action plan for the Pennvest Loan (‘Loan’).

The facility funded by the Loan has been shut down for many years (which has been disclosed in the annual financial reports to Pennvest

and in public filings by the parent of Bion PA 1, LLC) and the technology utilized in the facility is now obsolete.

The facility has not

been commercially operated for approximately six years and has generated zero income.

We recommend that Pennvest take appropriate steps

to remove and sell the equipment.” Pennvest responded favorably to the approach of selling the equipment.

On December 29, 2021, the

Company approved and executed a ‘Consent of the Sole Member of Bion PA 1’ (the “Consent to Dissolution”) that

authorized the complete liquidation and dissolution of PA1.

A Statement of Dissolution was filed by PA1 with the Colorado Secretary of

State on December 29, 2021.

The Company is of the understanding that the liquidation value of Bion PA 1’s property is substantially

below the current amount outstanding under the Funding Agreement dated October 27, 2010 by and between PA1 and Pennvest, the only known

secured creditor of PA1.

Post-dissolution, PA1’s activities will be limited entirely to activities required to properly distribute

its net assets to creditors and wind down its business.

PA1 and Pennvest agreed to

have the equipment sold by a third party auctioneer who arranged for the sale of its property and delivery of all proceeds (net

of commissions and customary costs of sale) to Pennvest.

The auction took place during the period between May 13-18, 2022.

The Company’s

personnel assisted PA1 with this process as needed at no cost to PA1.

The net sum of $104,725 was realized from the asset sale, which

sum was delivered to Pennvest on June 15, 2022.

The remaining unsold assets will be transferred to Kreider Farms during the next quarter

in order to complete the winding up of the Kreider 1 project.

Upon the complete distribution

of all assets of PA1, whether by transfer or sale and distribution of net proceeds as provided above, PA1 will use commercially reasonable

efforts to cause the cessation of all activities.

No distributions of PA1’s assets will be made to the Company or its affiliates.

The Consent to Dissolution authorized Mark A.

Smith, the Company’s President and the sole manager of PA1, to cause to be delivered

for filing the Statement of Dissolution, to give notice of the dissolution, and to take any other act necessary to wind up and liquidate

the business.

PA1 has made no payments

to vendors or other creditors in connection with the dissolution.

No distributions or payments of any kind have ever been made to the

Company, the sole member of PA1 since inception and no payment will be made to the Company or any affiliate in connection with the dissolution.

For more information regarding

the history and background of the Pennvest Loan and PA1, please review our Form 10-K Annual Reports for the years from 2008 through 2021

including the Notes to the Financial Statements included therein.

Chesapeake Bay Watershed:

Kreider Farms Projects/Pennsylvania

The urgency and priority of the need to clean up nutrient

(primarily nitrogen and phosphorus) pollution to the Chesapeake Bay was clearly demonstrated with promulgation of President Obama's 2009

Executive Order concerning clean-up of the Chesapeake Bay and the EPA’s publication and issuance during December 2010 of the Chesapeake

Bay Total Maximum Daily Load (TMDL) standard (http://www.epa.gov/reg3wapd/tmdl/ChesapeakeBay/tmdlexec.html )

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Based on these actions, greater compliance has been required commencing with

the 2016 ‘water year’.

EPA documents defined the overall mission as requiring an approximately 65-million-pound annual

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to state actions associated with reduced nutrient and sediment flows to the Chesapeake Bay.

According to the EPA’s Interim Evaluation

of Pennsylvania’s Milestone Progress published in June 2015, PA was 14.6 million pounds behind its 2014-2015 milestone commitments

According to the EPA’s Interim Evaluation

of Pennsylvania’s Milestone Progress published in June 2015, PA was 14.6 million pounds behind its 2014-2015 milestone commitments

for nitrogen, a remarkably large deficit given the previously stated 2-million-pound deficit from the 2012-2013 water year.

has placed PA’s agriculture and urban/suburban sectors under a “Backstop Actions Level”, the highest level of EPA oversight.

EPA has also stated that if load reductions remain off track, EPA may consider seeking additional (and expensive) pollutant reductions

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In an effort to get back on track and hold off federal

intervention, PA unveiled a purported “comprehensive strategy”

to "reboot"

intervention, PA unveiled a purported “comprehensive strategy” to "reboot"

the state's efforts to improve water quality in January 2016.

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are continuing today, the PADEP Secretary resigned in May 2016 and PA appears to have slowed implementation efforts recently while seeking

alternative approaches to reduce PA’s nitrogen pollution to the Chesapeake Bay.

The budget spending package that was passed by the

PA legislature in July 2018 contained no new funding for clean water related to either the Chesapeake Bay compliance mandates or state

alternative approaches to reduce PA’s nitrogen pollution to the Chesapeake Bay.

The EPA has continued to reject PA’s proposed

plans related to the Chesapeake Bay clean-up mandate as inadequate.

Recent reports indicate that PA is in need of 32 million pounds of

nitrogen reductions to meet its requirements.

Litigation has been initiated against PA and the EPA by neighboring states to compel performance

by PA and enforcement by the EPA.

The recent PA budget spending package that was passed by the PA legislature in 2022 includes allocation

of some PA’s remaining pandemic relief funding for clean water related to either the Chesapeake Bay compliance mandates or state

water quality.

As a result of PA’s default of its Bay mandates,

However, it appears that the funds will likely be expended on existing unsuccessful programs and clean-up strategies.

As a result of PA’s default of its Bay mandates,

and the host of upcoming both short and long-term specific commitments and compliance deadlines, Bion believes that its long-term opportunity

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During 2008, Bion executed an agreement to install

a Bion System at the Kreider Farms (“KF”) in Lancaster County, Pennsylvania to reduce nitrogen (including ammonia emissions

which are re-deposited as nitrogen from the atmosphere) and phosphorus in the farm's effluent.

Bion undertook this project due, in large

part, to Pennsylvania's nutrient credit trading program, which was established to provide cost-effective reductions of the excess flow

of nutrients (nitrogen and phosphorus) into the Chesapeake Bay watershed.

Bion worked extensively with the Pennsylvania Department of

Environmental Protection ('PADEP') over several years to establish nutrient credit calculation/ verification methodologies that were appropriate

to Bion's 2G Tech and recognizes its 'multi-media' (both water and atmospheric) approach to nutrient reductions.

Pennsylvania's

nutrient credit trading program allows for voluntary credit trading between a 'non-point source' (such as a dairy or other agricultural

sources) and a 'point source' polluter, such as a municipal waste water treatment plant or a housing development.

For example, pursuant

to this program, since Bion can reduce the nutrients from an existing dairy much more cost-effectively than a municipal wastewater treatment

plant can reduce nutrients to meet its baseline, a municipal facility can purchase nutrient reduction credits (‘Credits’)

from Bion to offset its nutrient discharges, rather than spending significantly more money to make (and operate) the plant upgrades necessary

to achieve its own reductions.

However, the market for long term Credits in PA has failed to develop any significant breadth or depth

and no Credits have been sold from the Kreider 1 system.

During May 2008, the PADEP approved Bion's initial

protocols to determine how many tradable nutrient (nitrogen and phosphorus) credits Bion would receive for nutrient reductions achieved

through installation of its comprehensive dairy waste management 2G Tech Kreider 1 project pursuant to PA's efforts under the Chesapeake

Bay Program mandates.

During April 2010, the PADEP issued an amended certification.

The PADEP's approval includes the certification

of credits, both for ammonia air emission reductions, and for significantly reducing the leaching and runoff potential of land-applied

The PADEP has certified the Kreider 1 dairy system for 107 nitrogen and 13 phosphorus credits (each credit represents an annual

pound of reduction) for each of the 1,200 dairy cows (subject to testing and verification based on operational data).

Bion's agreements

with Kreider Farms provide for the Kreider 1 System to expand through-put to treat the waste from the Kreider dairy support herd after

the PADEP has verified the operating results.

It is anticipated that this expansion will take place and lead to a proportionate increase

in credits generated for sale, only if a more robust market for long term nutrient reductions develops.

The economics (potential revenues, profitability

and continued operation) of the Kreider 1 System were based almost entirely on the long-term sale of nutrient (nitrogen and/or phosphorus)

reduction credits to meet the requirements of the Chesapeake Bay environmental clean-up.

See below for further discussion.

Pursuant to the KF agreements, Kreider 1 system to

treat KF's dairy waste streams to reduce nutrient releases to the environment, while generating marketable nutrient credits and renewable

energy, was designed, constructed and entered full-scale operation during 2011.

On January 26, 2009, the Board of the Pennsylvania

Infrastructure Investment Authority (“Pennvest”) approved a $7.75 million loan to Bion PA 1, LLC (“PA1”), a wholly-owned

subsidiary of the Company, for the initial Kreider Farms project (“Kreider 1”).

After substantial unanticipated delays,

on August 12, 2010, PA1 received a permit for construction of the Kreider 1 system.

Construction activities commenced during November

The closing/settlement of the Pennvest Loan took place on November 3, 2010.

PA1 finished the construction of the Kreider

1 System and entered a period of system ‘operational shakedown’

during May 2011.

The Kreider 1 System reached full,

stabilized operation by the end of the 2012 fiscal year.

During 2011, the PADEP re-certified the nutrient credits for this project.

The PADEP issued final permits for the Kreider 1 System (including the credit verification plan) on August 1, 2012, on which date the

Company deemed that the Kreider System was ‘placed in service’.

As a result, PA1 commenced generating nutrient reduction

credits for potential sale, while continuing to utilize the Kreider 1 system to test technology improvements and add-ons.

substantial liquidity in the Pennsylvania nutrient credit market for long term nutrient reduction credits has never developed significant

breadth and depth, which limited liquidity/depth has negatively impacted Bion's business plans and has made it impossible to economically

monetize the nutrient reductions created by PA1's Kreider 1 project (and Bion's other proposed projects in PA).

These difficulties have

prevented PA1 from generating any material revenues from the Kreider 1 project to date and it is unlikely that PA1 will ever be able to

generate such revenues from the Kreider 1 system (as designed and constructed).

PA1 had sporadic discussions/negotiations with Pennvest

related to forbearance and/or re-structuring its obligations pursuant to the Pennvest Loan for more than seven years.

In the context of

such discussions/negotiations, PA1 elected not to make interest payments to Pennvest on the Pennvest Loan since January 2013.

Additionally,

PA1 has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan

as a current liability as of June 30, 2021.

Due to the failure of the PA nutrient reduction credit market to develop, the Company

determined that the carrying amount of the property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted

cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits and,

therefore, PA1 and the Company recorded impairments related to the value of the Kreider 1 assets of $1,750,000 and $2,000,000 at June

30, 2015 and June 30, 2014, respectively.

During the 2016 fiscal year, effective June 30, 2016, PA1 and the Company recorded an

impairment of $1,684,562 to the value of the Kreider 1 assets which reduced the value on the Company’s books to zero.

impairment reflects management’s judgment that the salvage value of the Kreider 1 assets roughly equaled PA1’s contractual

obligations related to the Kreider 1 system, including expenses related to the decommissioning of the Kreider 1 system.

On September 25, 2014, Pennvest exercised its right

to declare the Pennvest Loan in default and accelerated the Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus

late charges) on or before October 24, 2014.

PA1 did not make the payment and does not have the resources to make the payments demanded

PA1 commenced discussions and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal

made during the fall of 2014.

PA1 made a new proposal to Pennvest during September 2021 which proposal is presently under consideration

PA1 provides Pennvest with its financial statements (which include a description of system status) annually.

During the 2021

fiscal year, Pennvest’s auditors requested a ‘corrective action plan’

and PA1 informed Pennvest that “…

there is no viable corrective action plan for the Pennvest Loan (‘Loan’).

The facility funded by the Loan has been shut down

for many years (which has been disclosed in the annual financial reports to Pennvest and in public filings by the parent of Bion PA 1,

LLC) and the technology utilized in the facility is now obsolete.

The facility has not been commercially operated for approximately six

years and has generated zero income.

We recommend that Pennvest take appropriate steps to remove and sell the equipment.”

responded favorably to the approach of selling the equipment but no actions have yet taken place.

PA1 and the Company are currently discussing

proposals with Pennvest seeking full resolution of these matters.

The Company anticipates additional communication with Pennvest on this

matter and the recent proposal during the current year.

It is not possible at this date to predict the final outcome of this matter, but

the Company believes it is likely that that the equipment will be sold with the proceeds delivered to Pennvest during our current fiscal

year as part of a resolution.

However , the resolution of these matters including the manner and means of such equipment sale has

not been agreed upon as of this date.

PA1 will evaluate the appropriate manner to resolve/wrap-up its business over the balance of the

current fiscal year.

Note that the projected economics (potential

revenues, profitability and continued operation) of the Kreider 1 System were based almost entirely on the long-term sale of nutrient

(nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake Bay environmental clean-up.

See below for further

During August 2012, the Company provided Pennvest

(and the PADEP) with data demonstrating that the Kreider 1 system met the 'technology guaranty' standards which were incorporated in the

Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA1.

However, the Company’s consolidated

balance sheet as of June 30, 2020 reflects the Pennvest Loan as a liability of $9,585,883 despite the fact that the obligation (if any)

solely an obligation of PA 1.

The Company is currently not operating the Kreider

1 System but continues to ensure that some equipment maintenance work takes place pending development of a more robust market for its

nutrient reductions and/or its potential inclusion within the Kreider 2 Project as discussed above.

The original Kreider agreements provided for Bion

to develop a waste treatment/renewable energy production facility to treat the waste from Kreider's approximately 6+ million chickens

Bion undertook this project (through PA1)

due, in large part, to Pennsylvania's nutrient credit trading program, which was established to provide cost-effective reductions of

the excess flow of nutrients (nitrogen and phosphorus) into the Chesapeake Bay watershed.

Bion worked extensively with the Pennsylvania

Department of Environmental Protection ('PADEP') over several years to establish nutrient credit calculation/ verification methodologies

that were appropriate to Bion's 2G Tech and recognizes its 'multi-media' (both water and atmospheric) approach to nutrient reductions.

Pennsylvania's nutrient credit trading program allows for voluntary credit trading between a 'non-point source' (such as a dairy or other

agricultural sources) and a 'point source' polluter, such as a municipal waste water treatment plant or a housing development.

the market for long term Credits in PA has failed to develop any significant breadth or depth and no Credits were sold by PA1 from the

Kreider 1 system.

The original Kreider agreements also provided for

Bion to develop a waste treatment/renewable energy production facility to treat the waste from Kreider's approximately 6+ million chickens

(planned to expand to approximately 9-10 million)(and potentially other poultry operations and/or other waste streams)('Kreider Renewable

Energy Facility' or ' Kreider 2 Project').

On May 5, 2016, the Company executed a stand-alone joint venture agreement with Kreider Farms

covering all matters related to development and operation of a system to treat the waste streams from Kreider's poultry facilities in

Bion PA2 LLC ("PA2").

The Company continues its development work related to the details of the Kreider 2 Project.

2011 the PADEP certified Kreider 2 2G Tech Project design for 559,457 nutrient credits under the old EPA's Chesapeake Bay model.

anticipates that the 3G Tech Kreider 2 Project will be re-certified for between 2-4 million (or more) nutrient reduction credits (for

treatment of the waste stream from Kreider's poultry) pursuant to a future reapplication (or subsequent amended application) pursuant

to the amended EPA Chesapeake Bay model and 2018 agreements between the EPA and PA.

Note that this Project may be expanded in the future

to treat wastes from other local and regional CAFOs (poultry and/or dairy –

including the Kreider Dairy) and/or Kreider poultry

expansion (some of which may not qualify for nutrient reduction credits).

The review process to clarify certain issues related to credit

calculation and verification commenced during 2014 based on Bion’s 2G Tech but has been placed on hold pending development of a

robust market for nutrient reductions in PA.

The Company anticipates it will submit an amended application based on our 3G Tech once these

matters are clear.

Site specific design and engineering work for this facility, which may be one of the first full-scale projects to utilize

Bion's 3G Tech, have not commenced, and the Company does not yet have financing in place for the Kreider 2 Project.

This opportunity is

being pursued through PA2.

If there are positive developments related to the market for nutrient reductions in PA, of which there is no

assurance, the Company intends to re-commence development, design and construction of the Kreider 2 Project thereafter.

The economics

(potential revenues and profitability) of the Kreider 2 Project, despite its use of Bion's 3G Tech for increased recovery of marketable

by-products, are based in material part the long-term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements

of the Chesapeake Bay environmental clean-up.

However, liquidity in the PA nutrient credit market has not developed significant breadth

and depth, which lack of liquidity has negatively impacted Bion's business plans and will most likely continue delay PA2's Kreider 2 Project

and other proposed projects in PA.

On May 5, 2016, the Company executed a stand-alone joint venture agreement (‘JVA’)

with Kreider Farms covering all matters related to development and operation of a system to treat the waste streams from Kreider's poultry

facilities in Bion PA2 LLC ("PA2").

Bion anticipates that it will execute an updated JVA with Kreider Farms during the current

fiscal year which will include utilization of Bion’s Gen3Tech and other matters.

The Company continues its pre-development work

related to the details of the Kreider 2 Project.

For more information regarding the history and background of the Kreider 2 Project,

please review our Forms 10-K for the years from 2008 through 2021.

The Company believes that Pennsylvania is potentially

‘ground zero’

in the long-standing clean water battle between agriculture and the further regulation of agriculture relative

‘ground zero’ in the long-standing clean water battle between agriculture and the further regulation of agriculture relative

to nutrient impacts.

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Sales of Common Stock during 2022 and 2021 Fiscal

During the year ended June 30, 2022, 2,315,550 warrants

were exercised to purchase 2,315,550 shares of the Company’s common stock at $0.75 per share for total proceeds of $1,736,662, net

proceeds of $1,718,061 after commissions of $18,601.

During the year ended June 30, 2022, Smith elected

to convert accounts payable of $17,711 into an aggregate of 35,424 units at $0.50 per unit (pursuant to the 2006 Consolidated Incentive

Plan) with each unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s stock for

$0.75 per share until December 31, 2024.

During the year ended June 30, 2022, the Company issued

25,000 units at $1.10 per until for services of $27,500.

During the year ended June 30, 2021, the Company entered

into subscription agreements, under three different offerings, to sell units for $0.50 per unit, with each unit consisting of one share

of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for

$0.75 per share with an expiry date of December 31, 2021 and pursuant thereto, the Company issued 3,720,000 units for total proceeds of

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During the year ended June 30, 2021 300,000 shares

of the Company’s restricted company stock were sold to an investor for $300,000.

During the year ended June 30, 2021, 129,364 shares

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1,186,824 units to various employees/consultants upon the conversion of debt (pursuant to the 2006 Consolidated Incentive Plan) with

each unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s stock for $0.75 per

share until June 30, 2023.

During the year ended June 30, 2021, Mark Smith elected

During the year ended June 30, 2021, Smith elected

to convert deferred compensation, accrued interest and accounts payable of $124,698, $3,342 and $52,360 respectively into an aggregate

of 360,805 units at $0.50 per unit (pursuant to the 2006 Consolidated Incentive Plan) with each unit consisting of one share of the common

stock and one warrant to purchase one share of the Company’s stock for $0.75 per share until December 31, 2024.

During the year ended June 30, 2021, the Company issued

144,000 units to Mr.

Smith for salary of $72,000, pursuant to the 2006 Consolidated Incentive Plan with each unit consisting of one share

of the common stock and one warrant to purchase one share of the Company’s stock for $0.75 per share until December 31, 2024.

stock and one warrant to purchase one share of the Company’s stock for $0.75 per share until December 31, 2024.

During the year

ended June 30, 2021, the Company issued 144,000 units to Smith for salary of $72,000, (pursuant to the 2006 Consolidated Incentive Plan)

with each unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s stock for $0.75

per share until December 31, 2024.

During the year ended June 30, 2021, 4,065,988 warrants

were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total proceeds of $3,049,491.

During the year ended June 30, 2020, the Company sold

3,168,001 shares of its unregistered common stock (not including 29,000 shares issued to entities for services and 143,316 shares issued

upon conversion of debt).

During the year ended June 30, 2020, the Company sold 18,000 units at $0.50 per unit and received

gross proceeds of $9,000 and net proceeds of $8,100;

each unit consisting of one share of the Company’s restricted common

stock and one half warrant to purchase half a share of the Company’s restricted common stock at $0.75 until December 31, 2020.

During the year ended June 30, 2020, the Company also sold 2,000,001 units at $0.50 per unit, and received gross proceeds of

$1,000,000 and net proceeds of $910,500 with each unit consisting of one share of the Company’s restricted common stock and one

warrant to purchase one share of the Company’s restricted common stock at $0.75 per share until December 31, 2020.

the Company also sold 1,150,000 units at$0.50 per unit and received gross proceeds of $575,000 and net proceeds of $517,500 with each

unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s

restricted common stock at $0.75 until December 31, 2021.

During the year ended June 30, 2020, Mark Smith elected to convert

a loan payable, accrued expenses and interest of $15,000, $52,830 and $3,828 respectively, into an aggregate 143,316 units at $0.50 per

unit, pursuant to the 2006 Consolidated Incentive Plan with each unit consisting of one share of the common stock and one warrant to purchase

one share of the Company’s stock for $0.75 per share until December 31, 2024.

were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total proceeds of $3,049,491.

There are a significant number of competitors in the

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Probably the most efficient way to assess competition in

this industry is to review the Newtrient Technology Catalog, a service provided by Newtrient Technology Catalog, which is produced by

an organization created by the dairy industry to help farmers, technology providers, manure-based

product developers and other stakeholders assess manure related challenges and opportunities .

this industry is to review the Newtrient, LLC catalogue which is produced by an organization created by the dairy industry to help farmers,

technology providers, manure-based product developers and other stakeholders assess manure related challenges and opportunities .

Many of the technologies reviewed by and organized by Newtrient in their catalog, such as Bion, address manure streams in addition to

The potential competition has increased with the growing governmental and public concern focused on pollution due to CAFO wastes.

Waste treatment lagoons which depend on anaerobic microorganisms ("anaerobic lagoons") are the most common traditional treatment

process for animal waste on large farms within the swine and dairy industries.

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phase-out in some states.

Although we believe that Bion’s comprehensive solution is the most economically and technologically

viable solution for the current problems, other alternative (though partial) solutions do exist, including, for example, synthetic lagoon

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beef and sustainable organic beef market segments and organic soil amendment/fertilizer and feed ingredient markets that are being targeted

by Bion’s 3G Tech JVs as discussed above.

by Bion’s Gen3Tech JVs as discussed above.

There are many companies that are already selling

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We anticipate initially developing, owning

interests in, and operating only one or a few Projects commencing during 2021and 2022 and, thereafter, developing a limited number of

Projects at a time.

interests in, and operating only one or a small number of Projects commencing during 2023 and, thereafter, developing a limited number

of Projects at a time.

Thus, at least for the near future, our revenues will be dependent on a relatively small number of major Projects,

participants and/or customers.

In our CAFO Retrofit/remediation business segment,

we currently have only built one system and it is no longer operating and only have contracts with only a single party.

However, there

are thousands of CAFO’s in the United States and we anticipate that in the future we will have agreements with many CAFO customers.

We are the sole owner of seven United States patents.

Bion also owns one Australian patent, two Canadian patents, one patent from New Zealand and two patents from Mexico.

Additionally, Bion

has one United States patent application pending and has three International patent applications currently pending.

We are the sole owner of five United States patents.

Additionally, Bion has two United States patent applications pending and has three International patent applications currently pending.

Patent Numbers and date of issue:

United States Currently Issued:

Low Oxygen Biologically Mediated Nutrient Removal:

(NdeN+PwA) James W.

Morris & Jere Northrop (Exp 12/26/2021)

Micro-Electron Acceptor Phosphorous Accumulating Organisms:

(NdeN+PwoA Microbial) James W.

Morris & Jere Northrop

(Exp 6/20/2023)

Low Oxygen Biologically Mediated Nutrient Removal:

(NdeN+PwoA Microbial) James W.

Morris & Jere Northrop (Exp 6/20/2023)

(1) 8,287,734:

Method for Treating Nitrogen in Waste Streams:

(OCN) Jere Northrop & James W.

(OCN) Jere Northrop &

Morris (Exp 3/20/31)

(2) 10,106,447:

Process to Recover Ammonium Bicarbonate from Wastewater:

Morton Orentlicher & Mark M.

Morton Orentlicher &

(3) 10,604,432:

to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

Process to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani,

Steve Pagano, Morton Orentlicher & Mark M.

(Exp 6/29/2037)

(4) 10,793,458:

to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

Process to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani, Steve

Pagano, Morton Orentlicher & Mark M.

(Exp 9/14/2035)

Australia Issued:

Low Oxygen Organic Waste Bioconversion System:

(NdeN) Jere Northrop & James W.

Morris (Exp 11/8/2021).

Canada Issued:

(5) 11,254,581:

Organic Waste Bioconversion System:

(NdeN) Jere Northrop & James W.

Morris (Exp 11/8/21).

(2) 2,503,166:

Biologically Mediated Nutrient Removal:

(NdeN+PwA) Jere Northrop & James W.

Morris (Exp 11/8/21).

Mexico Issued:

Low Oxygen Organic Waste Bioconversion System;

9/8/06 (notified 3/26/07) (NdeN) Jere Northrop & James W.

Morris (Exp 11/8/2021).

Low Oxygen Organic Waste Bioconversion System:

(NdeN) Jere Northrop & James W.

Morris (Exp 11/8/2021).

New Zealand Issued:

Low Oxygen Organic Waste Bioconversion System:

(NdeN) Jere Northrop & James W.

Morris (Exp 11/8/2021).

Process to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani, Morton Orentlicher,

Simon & Steve Pagano.

(Exp 9/14/2035)

We are also the sole owner of, or possess the contractual

right to acquire exclusive patent rights to, a pending United States patent application and three international applications as set forth

right to acquire exclusive patent rights to, a pending United States provisional patent application, a pending United States utility patent

application and three international applications as set forth below:

United States Currently Pending:

(1) 63/367,771 (provisional):

Methods For Recovering Ammonium Compounds From A Waste Stream;

Dominic Bassani

& Steve Pagan.

(Exp 7/06/2023)

(2) 17/589,037:

Process to Recover Ammonium Bicarbonate from Wastewater;

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

Dominic Bassani, Steve

Pagano, Morton Orentlicher & Mark M.

International Applications Currently Pending:

(1) EP18943551:

Process to recover ammonium bicarbonate from wastewater;

Dominic Bassani, Steve Pagano, Morton

Orentlicher & Mark M.

(2) CA3123802A1:

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

Process to recover ammonium bicarbonate from wastewater;

Dominic Bassani, Steve Pagano, Morton

Orentlicher & Mark M.

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

MX/a/2021/007358:

Process to recover ammonium bicarbonate from wastewater;

Dominic Bassani, Steve Pagano,

Morton Orentlicher & Mark M.

Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M.

In addition to such factors as innovation, technological

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however, no assurance that any such patents will be granted.

The Company has elected to expense all costs and

filing fees related to obtaining patents (resulting in no related asset being recognized in the Company’s consolidated balance sheets)

because the Company believes such costs and fees are immaterial (in the context of the Company’s total costs/expenses) and have

no direct relationship to the value of the Company’s patents.

The Company has elected to expense all costs and filing

fees related to obtaining patents (resulting in no related asset being recognized in the Company’s consolidated balance sheets)

because the Company believes such costs and fees are immaterial (in the context of the Company’s total costs/expenses) and have

no direct relationship to the value of the Company’s patents.

It may become necessary or desirable in the future

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Current research and development work is focused on

completion of the development and ongoing improvement of our 3G Tech (the initial version of which is ready for implementation in an appropriate

Project) with emphasis on increased recovery of valuable by-products (including nutrients in organic and/or non-organic forms, production

of renewable energy from by-products together with related renewable energy and/or environmental credits).

Bion believes its 3G Tech will

produce significantly greater value from the CAFO waste stream through the recovery of a concentrated natural nitrogen fertilizer

and pipeline-quality natural gas.

During the years ended June 30, 2021 and June 30, 2020, respectively, we

expended approximately $547,000 and $478,000 (excluding non-cash stock-based compensation) on research and development activities related

to our technology platform applications in support of large-scale, economically and environmentally sustainable Projects and Retrofits.

Since the 2018 fiscal year, Bion’s research and development has been primarily focused on development work to complete and further

refine development of our 3G Tech which will have the capacity to process dry, poultry CAFO waste streams in addition to wet dairy/beef/swine

CAFO waste streams and increase our ability to recover marketable by-products from the waste stream remediation including renewable natural

gas and nitrogen products (organic and non-organic).

Some work has also involved modifying and adding unit processes to our 3G Tech

platform with the objective of reducing capital costs and operating costs, while generating commercial equivalent by-products (and therefore,

potential revenue streams) and significantly increasing environmental efficiency.

As a result of these efforts (including their continuation

during the current period), Bion made new (and supplemental) patent filing(s) during the 2019-2021 fiscal years related to our 3G Tech.

The Company anticipates completion of its pilot system and pre-commercial testing for its 3G Tech by end of the current calendar year

to support design finalization for our initial 3G Tech systems.

Our technology focus is to separate and aggregate the various “assets”

in the waste stream and then to re-assemble them to maximize their economic value.

Our current research and development efforts have been

focused on developments that will minimize water removal requirements thereby significantly reducing the associated energy costs.

current efforts are focused on fertilizer and soil amendment products (organic and inorganic), water reuse, environmental and reduction

credits (including but not limited to nutrient, carbon, sediment, water and pathogen reduction) while reducing capital costs and operating

Bion continues to focus on “normalizing”

its technology platform for use on multiple species.

This effort has required

significant work and resource allocation on research regarding balancing the activities of each unit process so that its output enables

the subsequent unit processes to maximize efficiency and discharge to the subsequent unit process in order to produce a feedstock cost

The by-products of this series of unit processes (which include certain Bion proprietary elements) are then “reassembled”

into products to maximize their economic value.

To date, research and development results have supported our objectives.

completion of the development and ongoing improvement of our Gen3Tech (the initial version of which is ready for implementation in an

appropriate Project) with emphasis on increased recovery of valuable by-products (including nutrients in organic and/or non-organic

forms, production of renewable energy from by-products together with related renewable energy and/or environmental credits).

Bion believes

its Gen3Tech will produce significantly greater value from the CAFO waste stream through the recovery of a concentrated natural

nitrogen fertilizer and pipeline-quality natural gas.

During the years ended June 30, 2022 and June 30,

2021, respectively, we expended approximately $178,000 and $547,000 (excluding non-cash stock-based compensation) on research and development

activities related to our technology platform applications in support of large-scale, economically and environmentally sustainable Projects

and Retrofits.

Since the 2018 fiscal year, Bion’s research and development has been primarily focused on development work to complete

and further refine development of our Gen3Tech which will have the capacity to process dry, poultry CAFO waste streams in addition to

wet dairy/beef/swine CAFO waste streams and increase our ability to recover marketable by-products from the waste stream remediation including

renewable natural gas and nitrogen products (organic and non-organic).

Some work has also involved modifying and adding unit processes

to our Gen3Tech platform with the objective of reducing capital costs and operating costs, while generating commercial equivalent by-products

(and therefore, potential revenue streams) and significantly increasing environmental efficiency.

As a result of these efforts (including

their continuation during the current period), Bion made new (and supplemental) patent filing(s) during the 2019-2021 fiscal years related

to our Gen3Tech.

The Company anticipates completion of its pilot system and pre-commercial testing for its Gen3Tech by end of the current

calendar year to support design finalization for our initial Gen3Tech systems.

Our technology focus is to separate and aggregate the various

“assets” in the waste stream and then to re-assemble them to maximize their economic value.

Our current research and development

efforts have been focused on developments that will minimize water removal requirements thereby significantly reducing the associated

energy costs.

In addition, current efforts are focused on fertilizer and soil amendment products (organic and inorganic), water reuse,

environmental and reduction credits (including but not limited to nutrient, carbon, sediment, water and pathogen reduction) while reducing

capital costs and operating costs.

Bion continues to focus on “normalizing” its technology platform for use on multiple species.

This effort has required significant work and resource allocation on research regarding balancing the activities of each unit process

so that its output enables the subsequent unit processes to maximize efficiency and discharge to the subsequent unit process in order

to produce a feedstock cost effectively.

The by-products of this series of unit processes (which include certain Bion proprietary elements)

are then “reassembled” into products to maximize their economic value.

To date, research and development results have supported

our objectives.

Environmental Protection/Regulation and Public

4 unchanged sentences

However, we are involved in the business of CAFO waste treatment and are

impacted by environmental regulations in at least five different ways:

impacted by environmental regulations in at least four different ways:

Our marketing and sales success depends, to a substantial degree, on the pollution clean-up requirements of various governmental agencies,

5 unchanged sentences

be subject to environmental regulations.

Appropriate public policies need to be developed and implemented to facilitate environmental clean-up at CAFOs and the sale of nutrient

reductions from such activities in order for the Company to monetize the nutrient reductions generated by its facilities.

Additionally, our activities are affected by many

public policies and regulations (federal, state and local) related to other industries such as municipal waste and storm water treatment,

watershed-wide mandates, and others.

For example, the existing differences in the regulatory requirements for agriculture versus municipal

wastewater clean-up currently in place have negatively impaired the development of viable markets for nutrient reduction credits.

public policies and regulations (federal, state and local) related to other industries such as agriculture, food, energy, municipal waste

and storm water treatment, watershed-wide mandates, and others.

For example, the existing differences in the regulatory requirements for

agriculture versus municipal wastewater clean-up currently in place have negatively impaired the development of viable markets for nutrient

reduction credits.

Bion system installations and operations may require

1 unchanged sentence

Each of these programs has a series of compliance verification steps that need to be met in order to maintain proper standing

for use of the USDA shield’s on packaging.

As of September 1, 2021, we had 6 employees and

primary consultants, all of whom are performing services for the Company on a full-time basis.

The Company utilizes other consultants

and professionals on an ‘as needed’

Our future success depends in significant part on the continued service of our

key personnel and the ability to hire additional qualified personnel.

The competition for highly qualified personnel is intense, and there

can be no assurance that we will be able to retain our key managerial and technical employees or that we will be able to attract and retain

additional highly qualified technical and managerial personnel in the future.

None of our employees is represented by a labor union, and

we consider our relations with our employees to be good.

None of our employees is covered by "key person"

life insurance.

for use of the USDA shield on packaging.

As of September 1, 2022, we had 7 employees and primary

consultants, all of whom are performing services for the Company on a full-time basis.

The Company utilizes other consultants and professionals

on an ‘as needed’ basis.

Our future success depends in significant part on the continued service of our key personnel and

the ability to hire additional qualified personnel.

The competition for highly qualified personnel is intense, and there can be no assurance

that we will be able to retain our key managerial and technical employees or that we will be able to attract and retain additional highly

qualified technical and managerial personnel in the future.

None of our employees is represented by a labor union, and we consider our

relations with our employees to be good.

None of our employees is covered by "key person" life insurance.

RISK FACTORS.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business